255 research outputs found
The bmte command: Methods for the estimation of treatment effects when exclusion restrictions are unavailable
No full textWe present a new Stata command, bmte (bias-minimizing treatment effects), that implements two new estimators proposed in Millimet and Tchernis (2013, Journal of Applied Econometrics 28: 982–1017) and designed to estimate the effect of treatment when selection on unobserved variables exists and appropriate exclusion restrictions are unavailable. In addition, the bmteAnnals of Economic and Social Measurement 5: 475–492; 1979, Econometrica 47: 153–161); 2) a control function approach outlined in Heckman, LaLonde, and Smith (1999, Handbook of Labor Economics 3: 1865–2097) and Navarro (2008, The New Palgrave Dictionary of Economics [Palgrave Macmillan]); and 3) a more recent estimator proposed by Klein and Vella (2009, Journal of Applied Econometrics 24: 735–762) that exploits heteroskedasticity for identification. By implementing two new estimators alongside preexisting estimators, the bmte command provides a picture of the average causal effects of the treatment across a variety of assumptions. We present an example application of the command following Millimet and Tchernis (2013, Journal of Applied Econometrics 28: 982–1017)
Modelling and evaluating treatment effects in econometrics
No full textSelection bias in evaluating treatment effects : some formal illustrations / Arthur S. Goldberger -- Evaluating the effects of job training programs on wages through principal stratification / Junni L. Zhang, Donald B. Rubin, Fabrizia Mealli -- Graphical diagnostics of endogeneity / Xavier de Luna, Per Johansson -- Fertility and the health of children : a nonparametric investigation / Daniel J. Henderson, Daniel L. Millimet, Christopher F. Parmeter, Le Wang -- Program participation, labor force dynamics, and accepted wage rates / Jakob Roland Munch, Lars Skipper -- When is ATE enough? Risk aversion and inequality aversion in evaluating training programs / Rajeev Dehejia -- Matching estimation of dynamic treatment models : some practical issues / Michael Lechner -- The event-history approach to program evaluation / Jaap H. Abbring -- Panel data models and transitory fluctuations in the explanatory variable / Terra McKinnish -- An empirical assessment of the effects of parenthood on wages / Marianne Simonsen, Lars Skipper -- The employment effects of job-creation schemes in Germany : a microeconometric evaluation / Marco Caliendo, Reinhard Hujer, Stephan L. Thomsen -- Bayesian analysis of treatment effects in an ordered potential outcomes model / Mingliang Li, Justin L. Tobias -- Instrumental variables estimation of the average treatment effect in the correlated random coefficient model / Jeffrey M. WooldridgeThe estimation of the effects of treatments endogenous variables representing everything from individual participation in a training program to national participation in a World Bank loan program has occupied much of the theoretical and applied econometric research literatures in recent years. This volume brings together a diverse collection of papers on this important topic by leaders in the field from around the world. Some of the papers offer new theoretical contributions on various estimation techniques and others provide timely empirical applications illustrating the benefits of these and other methods.All of the papers share two common themes. First, as different estimators estimate different treatment effect parameters, it is vital to know what you are estimating and to know to whom the estimate applies. Second, as different estimators require different identification assumptions, it is crucial to understand the assumptions underlying each estimator. In empirical applications, the researcher must also make the case that the assumptions hold based on the available data and the institutional context. The theoretical contributions range over a variety of different estimators drawn from both statistics and econometrics, including matching and other non-parametric methods, panel methods, instrumental variables, methods based on hazard rate models and principal stratification, and they draw upon both the Bayesian and classical statistical traditions.The empirical contributions focus mainly on the evaluation of active labor market programs in Europe and the United States, but also examine of the effect of parenthood on wages and of the number of children on child health.It contains both theoretical and emperical contributions. It includes examples from both Europe and the US
Who Benefits from Marriage?
No full textThe phenomenon that married men earn higher average wages than unmarried men - the marriage premium - is well known. However, the robustness of the premium across the wage distribution and the underlying causes of the marriage premium are unclear. Focusing on the entire wage distribution and employing recently developed semi-non-parametric tests for quantile treatment effects, our findings cast doubt on the robustness of the premium. We find that the premium is explained by selection above the median, whereas a positive premium is obtained only at very low wages. The causal effect at low wages may be attributable to employer discrimination. Copyright (c) Blackwell Publishing Ltd and the Department of Economics, University of Oxford, 2008.
Chasing the Smokestack: Strategic Policymaking With Multiple Instruments
No full textEmpirical evidence suggesting that a considerable amount of horizontal strategic interaction exists amongst governments is important in light of recent devolutionary trends of many important public programs. The empirical approach in these studies typically relies on estimating reaction functions in a uni-dimensional policy framework, where a nonzero slope estimate is interpreted as evidence in support of strategic interactions. While this framework is a useful representation within certain contexts, it is potentially too restrictive; for example, in models of resource competition, localities may use multiple instruments in their recruiting pursuits, leading to potential strategic interactions across policy instruments. In this study, we first develop a simple theoretic construct that includes resource competition in a world of three-dimensional policy choice. The model suggests that while a zero-sloped reaction function may exist for any particular policy, this does not necessarily imply the absence of strategic interactions. We examine the implications of the model empirically using US state-level panel data over the period 1977-1994. The results suggest that important cross-policy strategic interactions exist, lending support in favor of the multi-dimensional framework, and indicate that uni-dimensional frameworks may present lower bound estimates of the degree of strategic interaction.
Industrial and environmental specialization
No full textThe presence of threshold effects or convex damage functions implies that the composition of pollutants may be as important in the determination of health outcomes as the level of pollution. As such, greater specialization in particular environmental hazards may suggest increasing costs from pollution even if overall pollution levels are declining. Using panel data from the US, it is verified that 'environmental specialization' is important, and likely to increase in the future due to greater industrial specialization.
The elephant in the corner: A cautionary tale about measurement error in treatment effects models
No full textResearchers in economics and other disciplines are often interested in the causal effect of a binary treatment on outcomes. Econometric methods used to estimate such effects are divided into one of two strands depending on whether they require the conditional independence assumption (i.e., independence of potential outcomes and treatment assignment conditional on a set of observable covariates). When this assumption holds, researchers now have a wide array of estimation techniques from which to choose. However, very little is known about their performance - both in absolute and relative terms - when measurement error is present. In this study, the performance of several estimators that require the conditional independence assumption, as well as some that do not, are evaluated in a Monte Carlo study. In all cases, the data-generating process is such that conditional independence holds with the 'real' data. However, measurement error is then introduced. Specifically, three types of measurement error are considered: (i) errors in treatment assignment, (ii) errors in the outcome, and (iii) errors in the vector of covariates. Recommendations for researchers are provided
Job search skills, employer size and wages
No full textMany theories concerning the underlying cause of the observed positive correlation between employer size and wages have been evaluated empirically, with a sizeable residual remaining unexplained. This study presents and tests a new theory: successful applicants for vacancies in larger employers possess greater job search skills and therefore are able to obtain a wage closer to their maximum potential wage. Empirical results confirm that differential job search abilities can account for approximately 20% of the difference in average observed wages across large and small employers.
Pollution Abatement Costs and Foreign Direct Investment Inflows to U.S. States: A Nonparametric Reassessment
No full textKeller and Levinson (2002, this Review, 84(4), 691-703) utilize state-level panel data on inflows of foreign direct investment along with an innovative measure of relative pollution abatement costs to assess the impact of environmental stringency on capital flows. Using standard parametric panel data models, the authors find moderate evidence that capital flows are sensitive to abatement costs. Using recently developed nonparametric methods, we assess the robustness of this conclusion. The nonparametric approach reveals that (i) some of the parametric results are not robust, (ii) the impact of relative abatement costs is heterogeneous across states and generally of smaller magnitude than previously suggested.Length: 15 pages
An environmental Paglin-Gini
No full textThe concept of an environmental Gini coefficient has been used recently by several researchers. In line with Paglin's historical critique of the income Gini coefficient, an environmental Paglin-Gini is proposed and estimated, more carefully considering the notion of 'perfect environmental inequality.'
Institutional arrangements in educational systems and student achievement: a cross-national analysis
No full textStudent achievement, School quality, Institutions, Quantile treatment effects, C14, C33, I21, I28,
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