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MTE with Misspecification

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  • Juli'an Mart'inez-Iriarte
  • Pietro Emilio Spini

Abstract

This paper studies the implication of a fraction of the population not responding to the instrument when selecting into treatment. We show that, in general, the presence of non-responders biases the Marginal Treatment Effect (MTE) curve and many of its functionals. Yet, we show that, when the propensity score is fully supported on the unit interval, it is still possible to restore identification of the MTE curve and its functionals with an appropriate re-weighting.

Suggested Citation

  • Juli'an Mart'inez-Iriarte & Pietro Emilio Spini, 2022. "MTE with Misspecification," Papers 2204.10445, arXiv.org.
    • Handle: RePEc:arx:papers:2204.10445
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    File URL: http://arxiv.org/pdf/2204.10445
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    References listed on IDEAS

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    1. James J. Heckman & Sergio Urzua & Edward Vytlacil, 2006. "Understanding Instrumental Variables in Models with Essential Heterogeneity," The Review of Economics and Statistics, MIT Press, vol. 88(3), pages 389-432, August.
    2. Acerenza, Santiago & Ban, Kyunghoon & Kedagni, Desire, 2021. "Marginal Treatment Effects with Misclassified Treatment," ISU General Staff Papers 202106180700001132, Iowa State University, Department of Economics.
    3. Hsiao,Cheng & Morimune,Kimio & Powell,James L. (ed.), 2001. "Nonlinear Statistical Modeling," Cambridge Books, Cambridge University Press, number 9780521662468, September.
    4. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
    5. Bjorklund, Anders & Moffitt, Robert, 1987. "The Estimation of Wage Gains and Welfare Gains in Self-selection," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 42-49, February.
    6. Hahn, Jinyong & Kuersteiner, Guido, 2002. "Discontinuities of weak instrument limiting distributions," Economics Letters, Elsevier, vol. 75(3), pages 325-331, May.
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