Journal Article

Instrumental variables, local instrumental variables and control functions

Date: 01 September 2008
Publisher: Econometrica
Published in: Econometrica , Vol. 76, No. 5, pp. 1191-1206

We consider the identification of the average treatment effect in models with continuous endogenous variables whose impact is heterogeneous. We derive a testable restriction that allows us to assess the degree of unobserved heterogeneity. Our analysis uses assumptions relating to the Local Instrumental Variables (LIV) approach and the control function approach.

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