@techreport{Belzil2012Characterizing,
abstract = {We build on Rosenzweig and Wolpin (2000) and Keane (2010) and show that in order to fulfill the Instrumental variable (IV) identifying moment condition, a policy must be designed so that compliers and non-compliers either have the same average error term, or have an error term ratio equal to their relative share of the population. The former condition (labeled Choice Orthogonality) is essentially a no-selection condition. The latter one, referred to as Weighted Opposite Choices, may be viewed as a distributional (functional form) assumption necessary to match the degree of selectivity between compliers and noncompliers to their relative population proportions. Those conditions form a core of implicit IV assumptions that are present in any empirical applications. They allow the econometrician to gain substantial insight about the validity of a specific instrument, and they illustrate the link between identification and the statistical strength of an instrument. Finally, our characterization may also help designing a policy generating a valid instrument.},
address = {Bonn},
author = {Christian Belzil and J\"{o}rgen Hansen},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {B4; C1; C3; 330; instrumental variable methods; implicit assumptions; treatment effects; Instrumentalvariablen-Sch\"{a}tzmethode; Stichprobenverfahren; Theorie},
language = {eng},
note = {urn:nbn:de:101:1-201205026057},
number = {6339},
publisher = {IZA},
title = {Characterizing the instrumental variable identifying assumption as sample selection conditions},
type = {Discussion Paper series, Forschungsinstitut zur Zukunft der Arbeit},
url = {http://hdl.handle.net/10419/58484},
year = {2012}
}
