Feasible IV Regression without Excluded Instruments

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Tác giả: Emmanuel Selorm Tsyawo

Ngôn ngữ: eng

Ký hiệu phân loại: 530.7 Instrumentation

Thông tin xuất bản: 2021

Mô tả vật lý:

Bộ sưu tập: Metadata

ID: 166539

Comment: Updates to the theory, more simulations, and re-organised appendix and online supplementThe relevance condition of Integrated Conditional Moment (ICM) estimators is significantly weaker than the conventional IV's in at least two respects: (1) consistent estimation without excluded instruments is possible, provided endogenous covariates are non-linearly mean-dependent on exogenous covariates, and (2) endogenous covariates may be uncorrelated with but mean-dependent on instruments. These remarkable properties notwithstanding, multiplicative-kernel ICM estimators suffer diminished identification strength, large bias, and severe size distortions even for a moderately sized instrument vector. This paper proposes a computationally fast linear ICM estimator that better preserves identification strength in the presence of multiple instruments and a test of the ICM relevance condition. Monte Carlo simulations demonstrate a considerably better size control in the presence of multiple instruments and a favourably competitive performance in general. An empirical example illustrates the practical usefulness of the estimator, where estimates remain plausible when no excluded instrument is used.
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