Questions tagged [identification]

Identification is the challenge of identifying the targeted channel or mechanism. Mostly, this is about disentangling correlation and causation.

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13
votes
5answers
10k views

What happens if the “control variables” are also endogenous?

I work in Political Economy, and a lot of the models include "innocent" control variables such as population, inequality, colonial legacy, etc. so that the author can claim unbiasedness on their ...
12
votes
4answers
630 views

What are the empirical techniques to show causation?

A simple linear regression only shows correlation between two variables. To establish causation, two commonly taught methods are IV regression and natural experiments. What are the other methods ...
8
votes
1answer
185 views

Identification with BBL

In the last few years, the estimator proposed by Bajari, Benkard, and Levin ('07) for dynamic games has been gaining popularity. It is relatively straight forward and is one of the only viable options ...
5
votes
1answer
160 views

IV - Is this procedure valid?

I have three variables: $y$, $x_1$ and $z$. I'm interested in finding the effect of $x_1$ on $y$. Unfortunately $x_1$ is endogenous so I use an instrument z. I know that $z$ is correlated with $x_1$....
4
votes
1answer
89 views

Economies of scale v.s. technological change

In Greene's Econometric Analysis, 7th edition, page 355, it is written that: A long-standing problem in the analysis of production functions has been the inability to separate economies of scale ...
3
votes
1answer
72 views

Specifying a Diff-In-Diff with multiple treated groups over multiple years

Suppose I have a group of 100 counties. Further suppose that the state decides to allocate a lump sum amount of money to some counties each year to boost spending on education in that county (until, ...
3
votes
0answers
101 views

Differences between LATE and Heckman Selection

I have heard that a paper by Heckman and Vytlacil demonstrate comparisons between nonparametric Heckman selection (NP Heckit) and the LATE (local average treatment effect) framework. Could someone ...
2
votes
1answer
53 views

Minimum sample size for cross-sectional RDD

I haven't done a regression discontinuity design (RDD) before. I know it requires a large sample size for identification, thus I fear that my sample size is not large enough. The study is cross-...
2
votes
1answer
75 views

What is the link between econometric theory and applied work?

I just don't understand how the theory, particularly pertaining to parameter identification is relevant when conducting applied work. Why must we present a sound identification strategy when carrying ...
1
vote
0answers
55 views

Trouble Deriving Indentification Scheme in Gertler-Karadi (2015) AEJ

I'm having trouble following a derivation that Gertler-Karadi (2015) AEJ http://pubs.aeaweb.org/doi/pdfplus/10.1257/mac.20130329 do in their paper on Footnote 4 on the bottom of page 52. I've tried ...