Instrumental Variable Estimatio
7 important questions on Instrumental Variable Estimatio
For what is IV estimation useful?
What does IV regression do?
- a part that might be correlated with nu_i
- a part that is not correlated with nu_i
By isolating the part that is not correlated with nu_i, it is possible to estimate delta.
What detects the IV?
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What are the conditions for a valid instrument?
2. Instrument exogeneity.
What are the assumptions for heterogeneous treatment effects?
- First-stage.
- Independence: instrument unrelated with all potential outcomes and potential treatment assignments.
- Monotonicity.
What does IV estimation measure?
Which complienace types are plausible in Balsakhi example with intention to treat as IV?
- Compliers
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