Empirical Decomposition of the IV–OLS Gap with Heterogeneous and Nonlinear Effects

Autor:	Shoya Ishimaru
Rok vydání:	2022
Předmět:	Economics and Econometrics Social Sciences (miscellaneous)
Zdroj:	The Review of Economics and Statistics. :1-45
ISSN:	1530-9142 0034-6535
Popis:	This study proposes an econometric framework to interpret and empirically decompose the difference between IV and OLS estimates given by a linear regression model when the true causal effects of the treatment are nonlinear in treatment levels and heterogeneous across covariates. I show that the IV–OLS coefficient gap consists of three estimable components: the difference in weights on the covariates, the difference in weights on the treatment levels, and the difference in identified marginal effects that arises from endogeneity bias. Applications of this framework to return-to-schooling estimates demonstrate the empirical relevance of this distinction in properly interpreting the IV–OLS gap.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::cf0761f723a46ccc228be565d6f153f1 https://doi.org/10.1162/rest_a_01169 Zobrazit plný text záznamu