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Title:Exogenous treatment and endogenous factors: Vanishing of omitted variable bias on the interaction term PDF Logo
Authors:Nizalova, Olena Y.
Murtazashvili, Irina
Issue Date:2012
Series/Report no.:Discussion Paper series, Forschungsinstitut zur Zukunft der Arbeit 6282
Abstract:Whether interested in the differential impact of a particular factor in various institutional settings or in the heterogeneous effect of policy or random experiment, the empirical researcher confronts a problem if the factor of interest is correlated with an omitted variable. This paper considers circumstances under which the estimate of the mentioned effect is consistent. We find that if the source of heterogeneity and omitted variable are jointly independent of policy or treatment, then the OLS estimate on the interaction term between the treatment and endogenous factor turns out to be consistent.
Subjects:treatment effect
heterogeneity
policy evaluation
random experiments
omitted variable bias
JEL:C21
C93
Persistent Identifier of the first edition:urn:nbn:de:101:1-201203064127
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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