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Results tagged with instrumental-variables
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user 256798
Instrumental variables (IV) are used for causal inference with observational data in the presence of endogeneity when standard regression methods yield biased and inconsistent estimates.
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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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IV-estimation vs. Heckman's selection model
1)The intuition of Heckman's model: there are two states of the world and a cost of choosing one of the states. The outcome variable in each state and the cost function have unobservables (error terms …
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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 …