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A matter of size: Comparing IV and OLS estimates

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  • Riccardo Ciacci

Abstract

Sizeable differences between OLS (Ordinary Least Squares) and IV (Instrumental Variables) estimates might be interpreted in the literature as evidence that the instrument is not valid. Yet, to the best of our knowledge, this comparison is carried out using only the OLS coefficient as a benchmark and does not account for statistical measures or information from the OLS regression. This paper establishes a framework where [1]’s methodology might be used to compare objectively OLS and IV estimates. This methodology offers evidence to support or discard IV estimates with respect to the OLS regression.

Suggested Citation

  • Riccardo Ciacci, 2025. "A matter of size: Comparing IV and OLS estimates," PLOS ONE, Public Library of Science, vol. 20(10), pages 1-15, October.
    • Handle: RePEc:plo:pone00:0334392
    DOI: 10.1371/journal.pone.0334392
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    References listed on IDEAS

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    3. Joshua Angrist & Alan Krueger, 2001. "Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments," Working Papers 834, Princeton University, Department of Economics, Industrial Relations Section..
    4. Daniel Mej√≠a & Pascual Restrepo, 2013. "Bushes and Bullets: Illegal Cocaine Markets and Violence in Colombia," Documentos CEDE 11934, Universidad de los Andes, Facultad de Economía, CEDE.
    5. Alberto Alesina & Paola Giuliano & Nathan Nunn, 2013. "On the Origins of Gender Roles: Women and the Plough," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(2), pages 469-530.
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