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Identifying Program Benefits When Participation Is Misreported

Author

Listed:
  • Tommasi, Denni

    (University of Bologna)

  • Zhang, Lina

    (University of Amsterdam)

Abstract

In cases of non-compliance with a prescribed treatment, estimates of causal effects typically rely on instrumental variables. However, when participation is also misreported, this approach can be severely biased. We provide an instrumental variable method that researchers can use to identify the true heterogeneous treatment effects in data that include both non-compliance and misclassification of treatment status. Our method can be used regardless of whether the treatment is misclassified because it is missing at random, missing not at random, or was generally mismeasured. We conclude with the use of a dedicated Stata command, ivreg2m, to assess the return on education in the United Kingdom.

Suggested Citation

  • Tommasi, Denni & Zhang, Lina, 2022. "Identifying Program Benefits When Participation Is Misreported," IZA Discussion Papers 15427, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp15427
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    More about this item

    Keywords

    treatment effect; causality; non-differential misclassification; weighted average of LATEs; endogeneity; program evaluation;
    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
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

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