Downloads
cwp341414.pdf
PDF | 684.11 KB
This paper develops a specification test for instrument validity in the heterogeneous treatment effect model with a binary treatment and a discrete instrument. The strongest testable implication for instrument validity is given by the condition for non-negativity of point- identifiable complier’s outcome densities. Our specification test infers this testable implication using a variance-weighted Kolmogorov-Smirnov test statistic. Implementation of the proposed test does not require smoothing parameters, even though the testable implications involve non-parametric densities. The test can be applied to both discrete and continuous outcome cases, and an extension of the test to settings with conditioning covariates is provided.
Authors
Research Associate University College London and Brown University
Toru is a Research Associate of the IFS, a Professor of Economics at UCL and an Associate Professor in the Department of Economics at Brown University
Working Paper details
- DOI
- 10.1920/wp.cem.2014.3414
- Publisher
- IFS
Suggested citation
Kitagawa, T. (2014). A Test for Instrument Validity. London: IFS. Available at: https://ifs.org.uk/publications/test-instrument-validity (accessed: 20 May 2024).
More from IFS
Understand this issue
Where next for the state pension?
13 December 2023
Social mobility and wealth
12 December 2023
Autumn Statement 2023: IFS analysis
23 November 2023
Policy analysis
The past and future of UK health spending
14 May 2024
Recent trends in and the outlook for health-related benefits
19 April 2024
Progression of nurses within the NHS
12 April 2024
Academic research
Keeping the peace whilst getting your way: Information, persuasion and intimate partner violence
17 May 2024
The role of hospital networks in individual mortality
13 May 2024
Forced displacement, mental health, and child development: Evidence from Rohingya refugees
10 May 2024