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Generalized instrumental inequalities: testing the instrumental variable independence assumption
- Source :
- Biometrika. 107:661-675
- Publication Year :
- 2020
- Publisher :
- Oxford University Press (OUP), 2020.
-
Abstract
- Summary This paper proposes a new set of testable implications for the instrumental variable independence assumption for discrete treatment, but unrestricted outcome and instruments: generalized instrumental inequalities. When outcome and treatment are both binary, but instruments are unrestricted, we show that the generalized instrumental inequalities are necessary and sufficient to detect all observable violations of the instrumental variable independence assumption. To test the generalized instrumental inequalities, we propose an approach combining a sample splitting procedure and an inference method for intersection bounds. This idea allows one to easily implement the test using existing Stata packages. We apply our proposed strategy to assess the validity of the instrumental variable independence assumption for various instruments used in the returns to college literature.
- Subjects :
- Statistics and Probability
Statistical assumption
Intersection (set theory)
Applied Mathematics
General Mathematics
05 social sciences
Instrumental variable
Inference
Binary number
Sample (statistics)
01 natural sciences
Agricultural and Biological Sciences (miscellaneous)
Outcome (probability)
Set (abstract data type)
010104 statistics & probability
0502 economics and business
Econometrics
0101 mathematics
Statistics, Probability and Uncertainty
General Agricultural and Biological Sciences
050205 econometrics
Mathematics
Subjects
Details
- ISSN :
- 14643510 and 00063444
- Volume :
- 107
- Database :
- OpenAIRE
- Journal :
- Biometrika
- Accession number :
- edsair.doi...........f8e81e566eb92593f1e4ea6996b27025