This paper considers the finite sample distribution of the 2SLS estimator and derives bounds on its exact bias in the presence of weak and/or many instruments. We then contrast the behavior of the exact bias expressions and the asymptotic expansions currently popular in the literature, including...

We examine the relationship between child quantity and quality. Motivated by the theoretical ambiguity regarding the sign of the marginal effects of additional siblings on children’s outcomes, our empirical model allows for an unrestricted relationship between family size and child outcomes....

"Statistical adequacy" is an important prerequisite for securing reliable inference in empirical modelling. This paper argues for more emphasis on replication that specifically assesses whether the results reported in empirical studies are based on statistically adequate models, i.e., models...

This paper estimates the impact of elite school attendance on long-run outcomes including completed education, income and fertility. Our data consists of individuals born in the 1950s and educated in a UK district that assigned students to either elite or non-elite secondary schools. Using...

This paper shows how a weighted average of a forward and reverse Jackknife IV estimator (JIVE) yields estimators that are robust against heteroscedasticity and many instruments. These estimators, called HFUL (Heteroscedasticity robust Fuller) and HLIM (Heteroskedasticity robust limited...

This paper estimates the impact of elite school attendance on long- run outcomes including completed education, income and fertility. Our data consists of individuals born in the 1950s and educated in a UK dis- trict that assigned students to either elite or non-elite secondary schools. Using...

This paper examines the correlated random coefficient model. It extends the analysis of Swamy (1971, 1974), who pioneered the uncorrelated random coefficient model in economics. We develop the properties of the correlated random coefficient model and derive a new representation of the variance...

The linear IV estimator, in which the dependent variable is a linear function of a potentially endogenous regressor, is a major workhorse in empirical economics. When this regressor takes on multiple values, the linear specification restricts the marginal effects to be constant across all...

This paper introduces a broad family of tests for the hypothesis of linearity in parameters of functions that are identified by conditional quantile restrictions involving instrumental variables. These tests are tantamount to assessments of lack of fit for quantile regression models involving...

The validity of existing empirical tests of the Pollution Haven Hypothesis (PHH) is constantly under scrutiny due to two shortcomings. First, the issues of unobserved heterogeneity and measurement error in environmental regulation are typically ignored due to the lack of a credible, traditional...