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Beyond LATE: Estimation of the Average Treatment Effect with an Instrumental Variable

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  • Aronow, Peter M.
  • Carnegie, Allison

Abstract

Political scientists frequently use instrumental variables (IV) estimation to estimate the causal effect of an endogenous treatment variable. However, when the treatment effect is heterogeneous, this estimation strategy only recovers the local average treatment effect (LATE). The LATE is an average treatment effect (ATE) for a subset of the population: units that receive treatment if and only if they are induced by an exogenous IV. However, researchers may instead be interested in the ATE for the entire population of interest. In this article, we develop a simple reweighting method for estimating the ATE, shedding light on the identification challenge posed in moving from the LATE to the ATE. We apply our method to two published experiments in political science in which we demonstrate that the LATE has the potential to substantively differ from the ATE.

Suggested Citation

  • Aronow, Peter M. & Carnegie, Allison, 2013. "Beyond LATE: Estimation of the Average Treatment Effect with an Instrumental Variable," Political Analysis, Cambridge University Press, vol. 21(4), pages 492-506.
  • Handle: RePEc:cup:polals:v:21:y:2013:i:04:p:492-506_01
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    1. repec:bpj:jecome:v:8:y:2019:i:1:p:27:n:6 is not listed on IDEAS
    2. Strobl, Renate & Wunsch, Conny, 2018. "Identification of causal mechanisms based on between-subject double randomization designs," CEPR Discussion Papers 13028, C.E.P.R. Discussion Papers.
    3. Rajeev Dehejia & Cristian Pop-Eleches & Cyrus Samii, 2015. "From Local to Global: External Validity in a Fertility Natural Experiment," NBER Working Papers 21459, National Bureau of Economic Research, Inc.
    4. Huber, Martin, 2019. "An introduction to flexible methods for policy evaluation," FSES Working Papers 504, Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland.
    5. Huber, Martin & W├╝thrich, Kaspar, 2017. "Evaluating local average and quantile treatment effects under endogeneity based on instruments: a review," FSES Working Papers 479, Faculty of Economics and Social Sciences, University of Freiburg/Fribourg Switzerland.

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