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Results tagged with endogeneity
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user 256798
Endogeneity refers to a situation where an explanatory variable in a model is correlated with the error term. Endogeneity induces biased parameter estimates. This is an important problem when working with observational data and the goal is causal inference.
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Does the Heckman correction with an exclusion restriction provide causal inference?
From Heckman, Urzua and Vytlacil (2006):
Two main approaches have been adopted to solve the selection bias problem: (a) selection models and (b) instrumental variable models.
The selection approach …
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Two stage models: Difference between Heckman models (to deal with sample selection) and Inst...
From Heckman, Urzua and Vytlacil (2006):
Example of selection bias: Consider the effects of a policy on the outcome of a country (e.g. GDP). If the countries that would have done well in terms of the …