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Unordered Monotonicity

Author

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  • Heckman, James J.

    () (University of Chicago)

  • Pinto, Rodrigo

    () (University of California, Los Angeles)

Abstract

This paper presents a new monotonicity condition for unordered discrete choice models with multiple treatments. Unlike a less general version of monotonicity in binary and ordered choice models, monotonicity in unordered discrete choice models along with other standard assumptions does not necessarily identify causal effects defined by variation in instruments, although in some cases it does. Our condition implies and is implied by additive separability of the choice equations in terms of observables and unobservables. These results follow from properties of binary matrices developed in this paper. We investigate conditions under which Unordered Monotonicity arises as a consequence of choice behavior. We represent IV estimators of counterfactuals as solutions to discrete mixture problems.

Suggested Citation

  • Heckman, James J. & Pinto, Rodrigo, 2017. "Unordered Monotonicity," IZA Discussion Papers 10821, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp10821
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    References listed on IDEAS

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    1. Jason R. Blevins, 2014. "Nonparametric identification of dynamic decision processes with discrete and continuous choices," Quantitative Economics, Econometric Society, vol. 5(3), pages 531-554, November.
    2. Heckman, James J. & Robb, Richard Jr., 1985. "Alternative methods for evaluating the impact of interventions : An overview," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 239-267.
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    Cited by:

    1. Vishal Kamat, 2017. "Identification with Latent Choice Sets: The Case of the Head Start Impact Study," Papers 1711.02048, arXiv.org.

    More about this item

    Keywords

    identification; selection bias; instrumental variables; monotonicity; revealed preference; Generalized Roy Model; binary matrices; discrete choice; discrete mixtures;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

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