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Comparing IV with structural models: What simple IV can and cannot identify

  • Heckman, James J.
  • Urzúa, Sergio

This paper compares the economic questions addressed by instrumental variables estimators with those addressed by structural approaches. We discuss Marschak's Maxim: estimators should be selected on the basis of their ability to answer well-posed economic problems with minimal assumptions. A key identifying assumption that allows structural methods to be more informative than IV can be tested with data and does not have to be imposed.

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File URL: http://www.sciencedirect.com/science/article/pii/S0304-4076(09)00197-3
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Article provided by Elsevier in its journal Journal of Econometrics.

Volume (Year): 156 (2010)
Issue (Month): 1 (May)
Pages: 27-37

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Handle: RePEc:eee:econom:v:156:y:2010:i:1:p:27-37
Contact details of provider: Web page: http://www.elsevier.com/locate/jeconom

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