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Tightening bounds in triangular systems

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  • Kédagni, Désiré
  • Mourifié, Ismael

Abstract

This note discusses partial identification in a nonparametric triangular system with discrete endogenous regressors and nonseparable errors. Recently, Jun et al. (2011, JPX) provide bounds on the structural function evaluated at particular values using exclusion, exogeneity and rank conditions. We propose a simple idea that often allows to improve the JPX bounds without invoking a new set of assumptions. Moreover, we show how our idea can be used to tighten existing bounds on the structural function in more general triangular systems.

Suggested Citation

  • Kédagni, Désiré & Mourifié, Ismael, 2014. "Tightening bounds in triangular systems," Economics Letters, Elsevier, vol. 125(3), pages 455-458.
    • Handle: RePEc:eee:ecolet:v:125:y:2014:i:3:p:455-458
    DOI: 10.1016/j.econlet.2014.10.019
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    References listed on IDEAS

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    1. Paul Embrechts & Marius Hofert, 2013. "A note on generalized inverses," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 77(3), pages 423-432, June.
    2. Azeem M. Shaikh & Edward J. Vytlacil, 2011. "Partial Identification in Triangular Systems of Equations With Binary Dependent Variables," Econometrica, Econometric Society, vol. 79(3), pages 949-955, May.
    3. Andrew Chesher, 2005. "Nonparametric Identification under Discrete Variation," Econometrica, Econometric Society, vol. 73(5), pages 1525-1550, September.
    4. Jun, Sung Jae & Pinkse, Joris & Xu, Haiqing, 2011. "Tighter bounds in triangular systems," Journal of Econometrics, Elsevier, vol. 161(2), pages 122-128, April.
    5. Andrew Chesher, 2003. "Identification in Nonseparable Models," Econometrica, Econometric Society, vol. 71(5), pages 1405-1441, September.
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    More about this item

    Keywords

    Nonparametric triangular systems; Partial identification; Instrumental variables; Rank conditions;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • 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

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