IDEAS home Printed from https://ideas.repec.org/a/ecj/econjl/v114y2004i494pc52-c83.html
   My bibliography  Save this article

Treatment effect heterogeneity in theory and practice

Author

Listed:
  • Joshua D. Angrist

Abstract

Instrumental Variables (IV) methods identify internally valid causal effects for individuals whose treatment status is manipulable by the instrument at hand. Inference for other populations requires homogeneity assumptions. This paper outlines a theoretical framework that nests causal homogeneity assumptions. These ideas are illustrated using sibling-sex composition to estimate the effect of childbearing on economic and marital outcomes. The application is motivated by American welfare reform. The empirical results generally support the notion of reduced labour supply and increased poverty as a consequence of childbearing but evidence on the impact of childbearing on marital stability and welfare use is more tenuous. Copyright 2004 Royal Economic Society.

Suggested Citation

  • Joshua D. Angrist, 2004. "Treatment effect heterogeneity in theory and practice," Economic Journal, Royal Economic Society, vol. 114(494), pages 52-83, March.
    • Handle: RePEc:ecj:econjl:v:114:y:2004:i:494:p:c52-c83
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Manski, Charles F, 1990. "Nonparametric Bounds on Treatment Effects," American Economic Review, American Economic Association, vol. 80(2), pages 319-323, May.
    2. Angrist, J.D. & Imbens, G.W., 1991. "Sources of Identifying Information in Evaluation Models," Harvard Institute of Economic Research Working Papers 1568, Harvard - Institute of Economic Research.
    3. Bronars, Stephen G & Grogger, Jeff, 1994. "The Economic Consequences of Unwed Motherhood: Using Twin Births as a Natural Experiment," American Economic Review, American Economic Association, vol. 84(5), pages 1141-1156, December.
    4. Phillips, Peter C.B., 2003. "Vision And Influence In Econometrics: John Denis Sargan," Econometric Theory, Cambridge University Press, vol. 19(3), pages 495-511, June.
    5. Melissa Schettini Kearney, 2004. "Is There an Effect of Incremental Welfare Benefits on Fertility Behavior?: A Look at the Family Cap," Journal of Human Resources, University of Wisconsin Press, vol. 39(2).
    6. Alberto Abadie & Joshua Angrist & Guido Imbens, 2002. "Instrumental Variables Estimates of the Effect of Subsidized Training on the Quantiles of Trainee Earnings," Econometrica, Econometric Society, vol. 70(1), pages 91-117, January.
    7. Angrist, Joshua D & Evans, William N, 1998. "Children and Their Parents' Labor Supply: Evidence from Exogenous Variation in Family Size," American Economic Review, American Economic Association, vol. 88(3), pages 450-477, June.
    8. Chamberlain, Gary, 1986. "Asymptotic efficiency in semi-parametric models with censoring," Journal of Econometrics, Elsevier, vol. 32(2), pages 189-218, July.
    9. Chamberlain, Gary, 1987. "Asymptotic efficiency in estimation with conditional moment restrictions," Journal of Econometrics, Elsevier, vol. 34(3), pages 305-334, March.
    10. Howard S. Bloom, 1984. "Accounting for No-Shows in Experimental Evaluation Designs," Evaluation Review, , vol. 8(2), pages 225-246, April.
    11. Wooldridge, Jeffrey M., 2003. "Further results on instrumental variables estimation of average treatment effects in the correlated random coefficient model," Economics Letters, Elsevier, vol. 79(2), pages 185-191, May.
    12. Angrist, Joshua D, 2001. "Estimations of Limited Dependent Variable Models with Dummy Endogenous Regressors: Simple Strategies for Empirical Practice," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(1), pages 2-16, January.
    13. Arellano, Manuel, 2002. "Sargan's Instrumental Variables Estimation and the Generalized Method of Moments," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(4), pages 450-459, October.
    14. James Heckman & Justin L. Tobias & Edward Vytlacil, 2001. "Four Parameters of Interest in the Evaluation of Social Programs," Southern Economic Journal, John Wiley & Sons, vol. 68(2), pages 210-223, October.
    15. Rebecca M. Blank, 2002. "Evaluating Welfare Reform in the United States," Journal of Economic Literature, American Economic Association, vol. 40(4), pages 1105-1166, December.
    16. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    17. Becker, Gary S & Landes, Elisabeth M & Michael, Robert T, 1977. "An Economic Analysis of Marital Instability," Journal of Political Economy, University of Chicago Press, vol. 85(6), pages 1141-1187, December.
    18. Joshua D. Angrist, 1991. "Instrumental Variables Estimation of Average Treatment Effects in Econometrics and Epidemiology," NBER Technical Working Papers 0115, National Bureau of Economic Research, Inc.
    19. James Heckman & Justin L. Tobias & Edward Vytlacil, 2001. "Four Parameters of Interest in the Evaluation of Social Programs," Southern Economic Journal, John Wiley & Sons, vol. 68(2), pages 210-223, October.
    20. Jeff Grogger & Stephen G. Bronars, 2001. "The Effect of Welfare Payments on the Marriage and Fertility Behavior of Unwed Mothers: Results from a Twins Experiment," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 529-545, June.
    21. Frolich, Markus, 2007. "Nonparametric IV estimation of local average treatment effects with covariates," Journal of Econometrics, Elsevier, vol. 139(1), pages 35-75, July.
    22. Wooldridge, Jeffrey M., 1997. "On two stage least squares estimation of the average treatment effect in a random coefficient model," Economics Letters, Elsevier, vol. 56(2), pages 129-133, October.
    23. V. Joseph Hotz & Guido W. Imbens & Jacob A. Klerman, 2000. "The Long-Term Gains from GAIN: A Re-Analysis of the Impacts of the California GAIN Program," NBER Working Papers 8007, National Bureau of Economic Research, Inc.
    24. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-475, March.
    25. Abadie, Alberto, 2003. "Semiparametric instrumental variable estimation of treatment response models," Journal of Econometrics, Elsevier, vol. 113(2), pages 231-263, April.
    26. A. D. Roy, 1951. "Some Thoughts On The Distribution Of Earnings," Oxford Economic Papers, Oxford University Press, vol. 3(2), pages 135-146.
    27. Tim Heaton, 1990. "Marital stability throughout the child-rearing years," Demography, Springer;Population Association of America (PAA), vol. 27(1), pages 55-63, February.
    28. Abadie A., 2002. "Bootstrap Tests for Distributional Treatment Effects in Instrumental Variable Models," Journal of the American Statistical Association, American Statistical Association, vol. 97, pages 284-292, March.
    29. Heckman, James J, 1990. "Varieties of Selection Bias," American Economic Review, American Economic Association, vol. 80(2), pages 313-318, May.
    30. James J. Heckman & Edward J. Vytlacil, 2000. "Local Instrumental Variables," NBER Technical Working Papers 0252, National Bureau of Economic Research, Inc.
    31. Angrist, Joshua D, 2001. "Estimations of Limited Dependent Variable Models with Dummy Endogenous Regressors: Simple Strategies for Empirical Practice: Reply," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(1), pages 27-28, January.
    32. Moffitt, Robert A., 1999. "New developments in econometric methods for labor market analysis," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 24, pages 1367-1397, Elsevier.
    33. Joshua D. Angrist & Guido W. Imbens & D.B. Rubin, 1993. "Identification of Causal Effects Using Instrumental Variables," NBER Technical Working Papers 0136, National Bureau of Economic Research, Inc.
    34. Andrew Cherlin, 1977. "The effect of children on marital dissolution," Demography, Springer;Population Association of America (PAA), vol. 14(3), pages 265-272, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    2. Huber, Martin & Wüthrich, 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.
    3. Committee, Nobel Prize, 2021. "Answering causal questions using observational data," Nobel Prize in Economics documents 2021-2, Nobel Prize Committee.
    4. Tommasi, Denni & Zhang, Lina, 2024. "Bounding program benefits when participation is misreported," Journal of Econometrics, Elsevier, vol. 238(1).
    5. Guillermo Cruces & Sebastian Galiani, 2003. "Generalizing the Causal Effect of Fertility on Female Labor Supply," Labor and Demography 0310002, University Library of Munich, Germany.
    6. Huber Martin & Wüthrich Kaspar, 2019. "Local Average and Quantile Treatment Effects Under Endogeneity: A Review," Journal of Econometric Methods, De Gruyter, vol. 8(1), pages 1-27, January.
    7. Imbens, Guido W., 2014. "Instrumental Variables: An Econometrician's Perspective," IZA Discussion Papers 8048, Institute of Labor Economics (IZA).
    8. Guido W. Imbens & Whitney K. Newey, 2009. "Identification and Estimation of Triangular Simultaneous Equations Models Without Additivity," Econometrica, Econometric Society, vol. 77(5), pages 1481-1512, September.
    9. Black, Dan A. & Joo, Joonhwi & LaLonde, Robert & Smith, Jeffrey A. & Taylor, Evan J., 2022. "Simple Tests for Selection: Learning More from Instrumental Variables," Labour Economics, Elsevier, vol. 79(C).
    10. Kaspar Wüthrich, 2020. "A Comparison of Two Quantile Models With Endogeneity," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 38(2), pages 443-456, April.
    11. Joshua Angrist & Ivan Fernandez-Val, 2010. "ExtrapoLATE-ing: External Validity and Overidentification in the LATE Framework," NBER Working Papers 16566, National Bureau of Economic Research, Inc.
    12. Guilhem Bascle, 2008. "Controlling for endogeneity with instrumental variables in strategic management research," Post-Print hal-00576795, HAL.
    13. Sloczynski, Tymon, 2018. "A General Weighted Average Representation of the Ordinary and Two-Stage Least Squares Estimands," IZA Discussion Papers 11866, Institute of Labor Economics (IZA).
    14. Aassve, Arnstein & Arpino, Bruno, 2008. "Estimation of causal effects of fertility on economic wellbeing: evidence from rural Vietnam," ISER Working Paper Series 2007-27, Institute for Social and Economic Research.
    15. Escanciano, Juan Carlos, 2023. "Irregular identification of structural models with nonparametric unobserved heterogeneity," Journal of Econometrics, Elsevier, vol. 234(1), pages 106-127.
    16. Patrick Kline & Christopher R. Walters, 2019. "On Heckits, LATE, and Numerical Equivalence," Econometrica, Econometric Society, vol. 87(2), pages 677-696, March.
    17. Markus Frölich & Martin Huber, 2017. "Direct and indirect treatment effects–causal chains and mediation analysis with instrumental variables," Journal of the Royal Statistical Society Series B, Royal Statistical Society, vol. 79(5), pages 1645-1666, November.
    18. Pereda-Fernández, Santiago, 2023. "Identification and estimation of triangular models with a binary treatment," Journal of Econometrics, Elsevier, vol. 234(2), pages 585-623.
    19. John DiNardo & David S. Lee, 2010. "Program Evaluation and Research Designs," Working Papers 1228, Princeton University, Department of Economics, Industrial Relations Section..
    20. Peter Hull & Michal Kolesár & Christopher Walters, 2022. "Labor by design: contributions of David Card, Joshua Angrist, and Guido Imbens," Scandinavian Journal of Economics, Wiley Blackwell, vol. 124(3), pages 603-645, July.

    More about this item

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecj:econjl:v:114:y:2004:i:494:p:c52-c83. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley-Blackwell Digital Licensing or Christopher F. Baum (email available below). General contact details of provider: https://edirc.repec.org/data/resssea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.