This paper compares the economic questions addressed by instrumental variables estimators with those addressed by structural approaches. We discuss Marschak’s Maxim: estimators should be selected on the basis of their ability to answer well-posed economic problems with minimal assumptions. A key identifying assumption that allows structural methods to be more informative than IV can be tested with data and does not have to be imposed.
Authors
Research Associate University of Chicago
James is a Research Associate of the IFS and the Henry Schultz Distinguished Service Professor of Economics at the University of Chicago.
Sergio Urzua
Journal article details
- DOI
- 10.1016/j.jeconom.2009.09.006
- Publisher
- Elsevier
- Issue
- Volume 156, Issue 1, May 2010
Suggested citation
Heckman, J and Urzua, S. (2010). 'Comparing IV with structural models: what simple IV can and cannot identify' 156(1/2010)
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