IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-01829558.html

Methods for strengthening a weak instrument in the case of a persistent treatment

Author

Listed:
  • Michel Berthélemy

    (TECH ECO (ex-ITESE) - Institut Technico-Economie - CEA-DES (ex-DEN) - CEA-Direction des Energies (ex-Direction de l'Energie Nucléaire) - CEA - Commissariat à l'énergie atomique et aux énergies alternatives - Université Paris-Saclay)

  • Petyo Bonev

    (FHSG - University of Applied Sciences St. Gallen)

  • Damien Dussaux

    (CERNA i3 - Centre d'économie industrielle i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique)

  • Magnus Söderberg

    (SDU - University of Southern Denmark)

Abstract

When evaluating policy treatments that are persistent and endogenous, available instrumental variables often exhibit more variation over time than the treatment variable. This leads to a weak instrumental variable problem, resulting in high bias or uninformative confidence intervals. We evaluate two new estimation approaches that strengthen the instrument. We derive their theoretical properties and show in Monte Carlo simulations that they outperform standard IV-estimators. We use our procedures to estimate the effect of public utility divestiture in the US nuclear energy sector. Our results show that divestiture significantly increases production efficiency.

Suggested Citation

  • Michel Berthélemy & Petyo Bonev & Damien Dussaux & Magnus Söderberg, 2018. "Methods for strengthening a weak instrument in the case of a persistent treatment," Post-Print hal-01829558, HAL.
    • Handle: RePEc:hal:journl:hal-01829558
    DOI: 10.1515/snde-2015-0094
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a
    for a similarly titled item that would be available.

    Other versions of this item:

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-01829558. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.