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Unordered Monotonicity

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  • Heckman, James J.

    (University of Chicago)

  • Pinto, Rodrigo

    (University of California, Los Angeles)

Abstract

This paper presents a new monotonicity condition for unordered discrete choice models with multiple treatments. Unlike a less general version of monotonicity in binary and ordered choice models, monotonicity in unordered discrete choice models along with other standard assumptions does not necessarily identify causal effects defined by variation in instruments, although in some cases it does. Our condition implies and is implied by additive separability of the choice equations in terms of observables and unobservables. These results follow from properties of binary matrices developed in this paper. We investigate conditions under which Unordered Monotonicity arises as a consequence of choice behavior. We represent IV estimators of counterfactuals as solutions to discrete mixture problems.

Suggested Citation

  • Heckman, James J. & Pinto, Rodrigo, 2017. "Unordered Monotonicity," IZA Discussion Papers 10821, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp10821
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    References listed on IDEAS

    as
    1. Hansen, Lars Peter, 1982. "Large Sample Properties of Generalized Method of Moments Estimators," Econometrica, Econometric Society, vol. 50(4), pages 1029-1054, July.
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    4. Hendry,David F. & Morgan,Mary S., 1997. "The Foundations of Econometric Analysis," Cambridge Books, Cambridge University Press, number 9780521588706, September.
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    6. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-475, March.
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    10. Constantine E. Frangakis & Donald B. Rubin, 2002. "Principal Stratification in Causal Inference," Biometrics, The International Biometric Society, vol. 58(1), pages 21-29, March.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Generalized Roy Model; revealed preference; monotonicity; instrumental variables; selection bias; identification; binary matrices; discrete choice; discrete mixtures;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination

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