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A practical comparison of the bivariate probit and linear IV estimators

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  • Chiburis, Richard C.
  • Das, Jishnu
  • Lokshin, Michael

Abstract

This paper compares asymptotic and finite sample properties of linear IV and bivariate probit in models with an endogenous binary treatment and binary outcome. The results provide guidance on the choice of model specification and help to explain large differences in the estimates depending on the specification chosen.

Suggested Citation

  • Chiburis, Richard C. & Das, Jishnu & Lokshin, Michael, 2012. "A practical comparison of the bivariate probit and linear IV estimators," Economics Letters, Elsevier, vol. 117(3), pages 762-766.
    • Handle: RePEc:eee:ecolet:v:117:y:2012:i:3:p:762-766
    DOI: 10.1016/j.econlet.2012.08.037
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    5. Murphy, Anthony, 2007. "Score tests of normality in bivariate probit models," Economics Letters, Elsevier, vol. 95(3), pages 374-379, June.
    6. Joshua D. Angrist, 1991. "Instrumental Variables Estimation of Average Treatment Effects in Econometrics and Epidemiology," NBER Technical Working Papers 0115, National Bureau of Economic Research, Inc.
    7. Angrist, Joshua D, 2001. "Estimations of Limited Dependent Variable Models with Dummy Endogenous Regressors: Simple Strategies for Empirical Practice: Reply," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(1), pages 27-28, January.
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