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Heterogeneity and Heteroskedasticity in Endogenous Switching Models: Estimating the Effects of Physician Advice on Calorie Consumption

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  • Riju Joshi
  • Jeffrey M. Wooldridge

Abstract

We describe two‐step control function estimation procedures for estimating average treatment effects in constant coefficient endogenous switching models with a binary treatment. We allow for additional heterogeneity by allowing for heteroskedasticity in the latent error in the treatment assignment equation. We apply our estimation procedures to evaluate the causal effect of physician advice on calorie consumption using National Health and Nutritional Examination data (2007–2016) and find that the effect of physician advice to lose weight on average calorie consumption roughly doubles compared to the traditional methods. Our findings recognize physician advice as a relevant low‐cost intervention in the campaign against rising obesity.

Suggested Citation

  • Riju Joshi & Jeffrey M. Wooldridge, 2025. "Heterogeneity and Heteroskedasticity in Endogenous Switching Models: Estimating the Effects of Physician Advice on Calorie Consumption," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 40(5), pages 540-553, August.
  • Handle: RePEc:wly:japmet:v:40:y:2025:i:5:p:540-553
    DOI: 10.1002/jae.3130
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