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A note on bounding average treatment effects

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  • Lafférs, Lukáš

Abstract

Imposing the monotone treatment selection (MTS) assumption and the monotone instrumental variable (MIV) assumption implies bounds on average treatment effect that differ from those commonly reported in the applied literature. Instead, for the bounds to be correct, we should use an MTS assumption conditional on the value of a monotone instrument (cMTS). In this paper, we present an empirical example of bounding the effect of the mother’s education on her children’s education, in which the MTS and cMTS assumptions lead to considerably different bounds on the treatment effects.

Suggested Citation

  • Lafférs, Lukáš, 2013. "A note on bounding average treatment effects," Economics Letters, Elsevier, vol. 120(3), pages 424-428.
  • Handle: RePEc:eee:ecolet:v:120:y:2013:i:3:p:424-428
    DOI: 10.1016/j.econlet.2013.05.029
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    References listed on IDEAS

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    1. Manski, Charles F, 1990. "Nonparametric Bounds on Treatment Effects," American Economic Review, American Economic Association, vol. 80(2), pages 319-323, May.
    2. Gundersen, Craig & Kreider, Brent, 2009. "Bounding the effects of food insecurity on children's health outcomes," Journal of Health Economics, Elsevier, vol. 28(5), pages 971-983, September.
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    5. Charles F. Manski, 1997. "Monotone Treatment Response," Econometrica, Econometric Society, vol. 65(6), pages 1311-1334, November.
    6. Libertad González, 2005. "Nonparametric bounds on the returns to language skills," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(6), pages 771-795.
    7. Kreider, Brent & Pepper, John V., 2007. "Disability and Employment: Reevaluating the Evidence in Light of Reporting Errors," Journal of the American Statistical Association, American Statistical Association, vol. 102, pages 432-441, June.
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    More about this item

    Keywords

    Partial identification; Bounds; Average treatment effect;

    JEL classification:

    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • I2 - Health, Education, and Welfare - - Education

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