IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Inverse Propensity Score Weighted Estimation of Local Average Treatment Effects and a Test of the Unconfoundedness Assumption

  • Stephen G. Donald
  • Yu-Chin Hsu
  • Robert P. Lieli

We propose inverse probability weighted estimators for the the local average treatment effect (LATE) and the local average treatment effect for the treated (LATT) under instrumental variable assumptions with covariates. We show that these estimators are asymptotically normal and efficient, and provide a higher order asymptotic mean squared error expansion for the LATE estimator. When the (binary) instrument satisfies a condition called one-sided non-compliance, we propose a Hausman-type test of whether treatment assignment is unconfounded conditional on some observables. The test is based on the fact that under one-sided non-compliance LATT coincides with the average treatment effect for the treated. We evaluate the effect of JTPA training programs on the earnings of participants to illustrate our methods. The unconfoundedness test suggests that treatment assignment among males is based partly on unobservables. In contrast, the hypothesis of random treatment assignment cannot be rejected among females.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.personal.ceu.hu/staff/repec/pdf/2012_9.pdf
File Function: Full text
Download Restriction: no

Paper provided by Department of Economics, Central European University in its series CEU Working Papers with number 2012_9.

as
in new window

Length:
Date of creation: 11 Aug 2010
Date of revision: 11 Aug 2010
Handle: RePEc:ceu:econwp:2012_9
Contact details of provider: Postal: Nador u. 9 - 1051 Budapest 5
Phone: (36-1) 327-3000
Fax: (36-1) 327-3001
Web page: http://economics.ceu.hu/

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Frolich, Markus, 2007. "Nonparametric IV estimation of local average treatment effects with covariates," Journal of Econometrics, Elsevier, vol. 139(1), pages 35-75, July.
  2. Markus Frölich & Blaise Melly, 2013. "Unconditional Quantile Treatment Effects Under Endogeneity," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 31(3), pages 346-357, July.
  3. Abadie, Alberto, 2003. "Semiparametric instrumental variable estimation of treatment response models," Journal of Econometrics, Elsevier, vol. 113(2), pages 231-263, April.
  4. Markus Frölich & Michael Lechner, 2006. "Exploiting regional treatment intensity for the evaluation of labour market policies," CeMMAP working papers CWP11/06, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  5. James Heckman, 1997. "Instrumental Variables: A Study of Implicit Behavioral Assumptions Used in Making Program Evaluations," Journal of Human Resources, University of Wisconsin Press, vol. 32(3), pages 441-462.
  6. Frölich, Markus & Melly, Blaise, 2008. "Identification of Treatment Effects on the Treated with One-Sided Non-Compliance," IZA Discussion Papers 3671, Institute for the Study of Labor (IZA).
  7. Heckman, James J & Ichimura, Hidehiko & Todd, Petra, 1998. "Matching as an Econometric Evaluation Estimator," Review of Economic Studies, Wiley Blackwell, vol. 65(2), pages 261-94, April.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ceu:econwp:2012_9. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anita Apor)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.