We consider the bias of the 2SLS estimator in the linear instrumental variables regression with one endogenous regressor only. By using asymptotic expansion techniques we approximate 2SLS coefficient estimation bias under various scenarios regarding the number and strength of instruments. The...

<p>The recent literature on instrumental variables (IV) features models in which agents sort into treatment status on the basis of gains from treatment as well as on baseline-pretreatment levels. Components of the gains known to the agents and acted on by them may not be known by the observing...</p>

Postel-Vinay and Robin's (2002) sequential auction model is extended to allow for aggregate productivity shocks. Workers exhibit permanent differences in ability while firms are identical. Negative aggregate productivity shocks induce job destruction by driving the surplus of matches with low...

Instrumental variable models for discrete outcomes are set, not point, identifying. The paper characterises identified sets of structural functions when endogenous variables are discrete. Identified sets are unions of large numbers of convex sets and may not be convex nor even connected. Each of...

<p>We investigate the problem of optimal choice of the smoothing parameter (bandwidth) for the regression discontinuity estimator. We focus on estimation by local linear regression, which was shown to be rate optimal (Porter, 2003). We derive the optimal bandwidth. This optimal bandwidth depends on...</p>

This paper compares the economic questions addressed by instrumental variables estimators with those addressed by structural approaches. We discuss Marschak's Maxim: estimators should be selected on the basis of their ability to answer well-posed economic problems with minimal assumptions. A key...

<p><p>This paper develops a formal language for study of treatment response with social interactions, and uses it to obtain new findings on identification of potential outcome distributions. Defining a person's treatment response to be a function of the entire vector of treatments received by the...</p></p>

<p>This paper formulates and estimates multistage production functions for children's cognitive and noncognitive skills. Skills are determined by parental environments and investments at different stages of childhood. We estimate the elasticity of substitution between investments in one period and...</p>

<p>Econometric inequality hypotheses arise in diverse ways. Examples include concavity restrictions on technological and behavioural functions, monotonicity and dominance relations, one-sided constraints on conditional moments in GMM estimation, bounds on parameters which are only partially...</p>

This paper investigates how enforcement of labor regulation affects the firm's use of informal labor and firm performance. Using firm level data on informal employment and firm performance, and administrative data on enforcement of regulation at the city level, we show that in areas where law...