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Bounds on Counterfactual Distributions Under Semi-Monotonicity Constraints

Author

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  • Stefan Boes

    (Socioeconomic Institute, University of Zurich)

Abstract

This paper explores semi-monotonicity constraints in the distribution of potential outcomes, first, conditional on an instrument, and second, in terms of the response function. The imposed assumptions are strictly weaker than traditional instrumental variables assumptions and can be gainfully employed to bound the counterfactual distributions, even though point identification is only achieved in special cases. The bounds have a simple analytical form and thus have much practical relevance in all instances when strong exogeneity assumptions cannot be credibly invoked. The bounding strategy is illustrated in a simulated data example and applied to the effect of education on smoking.

Suggested Citation

  • Stefan Boes, 2009. "Bounds on Counterfactual Distributions Under Semi-Monotonicity Constraints," SOI - Working Papers 0920, Socioeconomic Institute - University of Zurich.
  • Handle: RePEc:soz:wpaper:0920
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    File URL: http://www.econ.uzh.ch/static/wp_soi/wp0920.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    nonparametric bounds; treatment effects; causality; endogeneity; instrumental variables; policy 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
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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