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Inference on Local Average Treatment Effects for Misclassified Treatment

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  • YANAGI, Takahide

Abstract

We develop point-identification and inference methods for the local average treatment effect when the binary treatment contains a measurement error. The standard instrumental variable estimator is inconsistent for the parameter since the measurement error is non-classical by construction. Our proposed analysis corrects the problem by identifying the distribution of the measurement error based on the use of an exogenous variable such as a covariate or instrument. The moment conditions derived from the identification lead to the generalized method of moments estimation with asymptotically valid inferences. Monte Carlo simulations demonstrate the desirable finite sample performance of the proposed procedure.

Suggested Citation

  • YANAGI, Takahide, 2017. "Inference on Local Average Treatment Effects for Misclassified Treatment," Discussion Papers 2017-02, Graduate School of Economics, Hitotsubashi University.
  • Handle: RePEc:hit:econdp:2017-02
    Note: This version: February 21, 2017 First version: January 27, 2017
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    Cited by:

    1. Tommasi, Denni & Zhang, Lina, 2020. "Bounding Program Benefits When Participation Is Misreported," IZA Discussion Papers 13430, Institute of Labor Economics (IZA).
    2. Denni Tommasi & Arthur Lewbel & Rossella Calvi, 2017. "LATE with Mismeasured or Misspecified Treatment: An application to Women's Empowerment in India," Working Papers ECARES ECARES 2017-27, ULB -- Universite Libre de Bruxelles.
    3. Steven J. Haider & Melvin Stephens Jr., 2020. "Correcting for Misclassified Binary Regressors Using Instrumental Variables," NBER Working Papers 27797, National Bureau of Economic Research, Inc.
    4. Huber Martin & Wüthrich Kaspar, 2019. "Local Average and Quantile Treatment Effects Under Endogeneity: A Review," Journal of Econometric Methods, De Gruyter, vol. 8(1), pages 1-27, January.
    5. Hiroyuki Kasahara & Katsumi Shimotsu, 2019. "Identification of Regression Models with a Misclassified and Endogenous Binary Regressor," Papers 1904.11143, arXiv.org, revised Dec 2020.

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    More about this item

    Keywords

    misclassification; instrumental variable; non-differential measurement error; nonparametric method; causal inference;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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