IDEAS home Printed from https://ideas.repec.org/p/syd/wpaper/2123-9020.html
   My bibliography  Save this paper

Is Monotonicity in an IV and RD design testable? No, but you can still check it

Author

Listed:
  • Edwards, Ben
  • Fiorini, Mario
  • Stevens, Katrien
  • Taylor, Matthew

Abstract

Whenever treatment effects are heterogeneous and there is sorting into treatment based on the gain, monotonicity is a condition that both Instrumental Variable and fuzzy Regression Discontinuity designs have to satisfy for their estimand to be interpretable as a LATE. Angrist and Imbens (1995) argue that the monotonicity assumption is testable whenever the treatment is multivalued. We show that their test is informative if counterfactuals are observed. Yet applying the test without observing counterfactuals, as it is generally done, is not. Nevertheless, we argue that monotonicity can and should be investigated using a mix of economic intuition and data patterns, just like other untestable assumptions in an IV or RD design. We provide examples in a variety of settings as a guide to practice.

Suggested Citation

  • Edwards, Ben & Fiorini, Mario & Stevens, Katrien & Taylor, Matthew, 2013. "Is Monotonicity in an IV and RD design testable? No, but you can still check it," Working Papers 2013-06, University of Sydney, School of Economics.
    • Handle: RePEc:syd:wpaper:2123/9020
    as

    Download full text from publisher

    File URL: http://econ-wpseries.com/2013/201306.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Keane, Michael P., 2010. "Structural vs. atheoretic approaches to econometrics," Journal of Econometrics, Elsevier, vol. 156(1), pages 3-20, May.
    2. James J. Heckman & Sergio Urzua & Edward Vytlacil, 2006. "Understanding Instrumental Variables in Models with Essential Heterogeneity," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 389-432, August.
    3. David Deming & Susan Dynarski, 2008. "The Lengthening of Childhood," Journal of Economic Perspectives, American Economic Association, vol. 22(3), pages 71-92, Summer.
    4. Klein, Tobias J., 2010. "Heterogeneous treatment effects: Instrumental variables without monotonicity?," Journal of Econometrics, Elsevier, vol. 155(2), pages 99-116, April.
    5. David S. Lee & Thomas Lemieux, 2010. "Regression Discontinuity Designs in Economics," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 281-355, June.
    6. James J. Heckman & Edward Vytlacil, 2005. "Structural Equations, Treatment Effects, and Econometric Policy Evaluation," Econometrica, Econometric Society, vol. 73(3), pages 669-738, May.
    7. Patrick A. Puhani & Andrea M. Weber, 2008. "Does the early bird catch the worm?," Studies in Empirical Economics, in: Christian Dustmann & Bernd Fitzenberger & Stephen Machin (ed.), The Economics of Education and Training, pages 105-132, Springer.
    8. Sandra E. Black & Paul J. Devereux & Kjell G. Salvanes, 2011. "Too Young to Leave the Nest? The Effects of School Starting Age," The Review of Economics and Statistics, MIT Press, vol. 93(2), pages 455-467, May.
    9. Rashmi Barua & Kevin Lang, 2009. "School Entry, Educational Attainment and Quarter of Birth: A Cautionary Tale of LATE," NBER Working Papers 15236, National Bureau of Economic Research, Inc.
    10. Dionissi Aliprantis, 2012. "Redshirting, Compulsory Schooling Laws, and Educational Attainment," Journal of Educational and Behavioral Statistics, , vol. 37(2), pages 316-338, April.
    11. Kelly Bedard & Elizabeth Dhuey, 2006. "The Persistence of Early Childhood Maturity: International Evidence of Long-Run Age Effects," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(4), pages 1437-1472.
    12. Patrick J. McEwan & Joseph S. Shapiro, 2008. "The Benefits of Delayed Primary School Enrollment: Discontinuity Estimates Using Exact Birth Dates," Journal of Human Resources, University of Wisconsin Press, vol. 43(1).
    13. Todd E. Elder & Darren H. Lubotsky, 2009. "Kindergarten Entrance Age and Children’s Achievement: Impacts of State Policies, Family Background, and Peers," Journal of Human Resources, University of Wisconsin Press, vol. 44(3).
    14. Datar, Ashlesha, 2006. "Does delaying kindergarten entrance give children a head start?," Economics of Education Review, Elsevier, vol. 25(1), pages 43-62, February.
    15. Mühlenweg, Andrea & Blomeyer, Dorothea & Stichnoth, Holger & Laucht, Manfred, 2012. "Effects of age at school entry (ASE) on the development of non-cognitive skills: Evidence from psychometric data," Economics of Education Review, Elsevier, vol. 31(3), pages 68-76.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chen, Jiwei & Guo, Jiangying, 2022. "The effect of female education on fertility: Evidence from China’s compulsory schooling reform," Economics of Education Review, Elsevier, vol. 88(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fiorini, Mario & Katrien Stevens, 2014. "Assessing the Monotonicity Assumption in IV and fuzzy RD designs," Working Papers 2014-13, University of Sydney, School of Economics.
    2. Dionissi Aliprantis, 2014. "When Should Children Start School?," Journal of Human Capital, University of Chicago Press, vol. 8(4), pages 481-536.
    3. Philip J. Cook & Songman Kang, 2013. "Birthdays, Schooling, and Crime: New Evidence on the Dropout-Crime Nexus," NBER Working Papers 18791, National Bureau of Economic Research, Inc.
    4. Mario Fiorini & Katrien Stevens, 2021. "Scrutinizing the Monotonicity Assumption in IV and fuzzy RD designs," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 83(6), pages 1475-1526, December.
    5. Claire Crawford & Lorraine Dearden & Ellen Greaves, 2014. "The drivers of month-of-birth differences in children's cognitive and non-cognitive skills," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 177(4), pages 829-860, October.
    6. Rashmi Barua & Kevin Lang, 2009. "School Entry, Educational Attainment and Quarter of Birth: A Cautionary Tale of LATE," NBER Working Papers 15236, National Bureau of Economic Research, Inc.
    7. Dionissi Aliprantis, 2012. "Redshirting, Compulsory Schooling Laws, and Educational Attainment," Journal of Educational and Behavioral Statistics, , vol. 37(2), pages 316-338, April.
    8. Suziedelyte, Agne & Zhu, Anna, 2015. "Does early schooling narrow outcome gaps for advantaged and disadvantaged children?," Economics of Education Review, Elsevier, vol. 45(C), pages 76-88.
    9. Attar, Itay & Cohen-Zada, Danny, 2017. "The Effect of School Entrance Age on Educational Outcomes: Evidence Using Multiple Cutoff Dates and Exact Date of Birth," IZA Discussion Papers 10568, Institute of Labor Economics (IZA).
    10. Thomas S. Dee & Hans Henrik Sievertsen, 2018. "The gift of time? School starting age and mental health," Health Economics, John Wiley & Sons, Ltd., vol. 27(5), pages 781-802, May.
    11. Guo, Chuanyi & Wang, Xuening & Meng, Chen, 2023. "Does the early bird catch the worm? Evidence and interpretation on the long-term impact of school entry age in China," China Economic Review, Elsevier, vol. 77(C).
    12. Elizabeth U. Cascio & Diane Whitmore Schanzenbach, 2016. "First in the Class? Age and the Education Production Function," Education Finance and Policy, MIT Press, vol. 11(3), pages 225-250, Summer.
    13. Page, Lionel & Sarkar, Dipanwita & Silva-Goncalves, Juliana, 2019. "Long-lasting effects of relative age at school," Journal of Economic Behavior & Organization, Elsevier, vol. 168(C), pages 166-195.
    14. Nam, Kigon, 2014. "Until when does the effect of age on academic achievement persist? Evidence from Korean data," Economics of Education Review, Elsevier, vol. 40(C), pages 106-122.
    15. Claire Crawford & Lorraine Dearden & Ellen Greaves, 2013. "The drivers of month of birth differences in children's cognitive and non-cognitive skills: a regression discontinuity analysis," IFS Working Papers W13/08, Institute for Fiscal Studies.
    16. Julio Cáceres-Delpiano & Eugenio Giolito, 2024. "School starting age and the impact on school admission," Empirical Economics, Springer, vol. 67(1), pages 225-251, July.
    17. Görlitz, Katja & Penny, Merlin & Tamm, Marcus, 2019. "The long-term effect of age at school entry on competencies in adulthood," Ruhr Economic Papers 792, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    18. Bahrs, Michael & Schumann, Mathias, 2016. "Unlucky to Be Young? The Long-Term Effects of School Starting Age on Smoking Behaviour and Health," hche Research Papers 13, University of Hamburg, Hamburg Center for Health Economics (hche).
    19. Goncalo Lima & Luis Catela Nunes & Ana Balcao Reis & Maria do Carmo Seabra, 2022. "No country for young kids? The effects of school starting age throughout childhood and beyond," Nova SBE Working Paper Series wp639, Universidade Nova de Lisboa, Nova School of Business and Economics.
    20. Huang, Cheng & Zhang, Shiying & Zhao, Qingguo, 2020. "The early bird catches the worm? School entry cutoff and the timing of births," Journal of Development Economics, Elsevier, vol. 143(C).

    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:syd:wpaper:2123/9020. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Vanessa Holcombe (email available below). General contact details of provider: https://edirc.repec.org/data/deusyau.html .

    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.