Average Treatment Effect Bounds with an Instrumental Variable: Theory and Practice by Carlos A. Flores & Xuan Chen

Author:Carlos A. Flores & Xuan Chen
Language: eng
Format: epub
ISBN: 9789811320170
Publisher: Springer Singapore

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Violations of these testable implications is interpreted as indicating that one or more of the assumptions employed by an instrumental variable approach with a threshold crossing model on the treatment are not satisfied.

Bhattacharya et al. (2012) present a test for testable implications of the threshold crossing model on the treatment with a binary outcome. Using the finding in Heckman and Vytlacil (2000) that under the threshold crossing model on the treatment Manski (1990) bounds on the ATE simplify to those in Heckman and Vytlacil (2000), Bhattacharya et al. (2012) derive the conditions under which the two expressions of the bounds on the ATE equal each other for a binary outcome. These conditions are:

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