Defying the LATE? Identication of local treatment eects when the instrument violates monotonicity.

The instrumental variable method relies on a strong no-deers condition, which requires that the instrument aect every subject's treatment decision in the same direction. This paper shows that no-deers can be replaced by a weaker compliersdeers condition, which requires that a subgroup of compliers have the same size and the same distribution of potential outcomes as deers. This condition is necessary and sucient for IV to capture causal eects for the remaining part of compliers. In many applications, compliers-deers is a very weak condition. For instance, in Angrist & Evans (1998), 94% of DGPs compatible with the data satisfy compliers-deers, while 0% satisfy no-deers.


Issue Date:
2013-08
Publication Type:
Working or Discussion Paper
Record Identifier:
http://ageconsearch.umn.edu/record/270439
Language:
English
Total Pages:
36
JEL Codes:
C21; C26
Series Statement:
WERP 1020




 Record created 2018-04-02, last modified 2018-04-02

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