11 votes
Accepted

What does it mean to make an identification assumption?

Identifying assumption: assumptions made about the DGP that allows you to draw causal inference. E.g. exogeneity assumption for IV, parallel trends assumption in diff-in-diff. Identifying assumptions ...
Michael's user avatar
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6 votes

Identifying assumption meaning

"Identification" is the most loaded term in econometrics. There are multiple cheap talk equilibria with regard to its meaning. It is used with different intended (but related and overlapping)...
Michael's user avatar
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5 votes

What does it mean to make an identification assumption?

Maybe another example will help here: Imagine you would like to know the effect of smoking on the probability of getting cancer. By simply comparing cancer rates of smokers and non-smokers you might ...
Job's user avatar
  • 61
4 votes

Economies of scale v.s. technological change

The problem is to distinguish between changes along the production function, from $f(K_1, L_1)$ to $f(K_2, L_2)$, and changes of the production function, from $f(K_1, L_1)$ to $g(K_1, L_1)$. A very ...
user11629's user avatar
  • 170
4 votes
Accepted

Identification of firm-worker fixed effect wage equation

Think about a regression where you have two factors. Normally when you have a constant in the regression you would put one level of each factor to 0 as a reference level. Leaving out the constant you ...
Jesper Hybel's user avatar
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3 votes
Accepted

How to estimate $\gamma$ in the following model?

If $u$ is normally distributed conditional on $x$ and $Q$, then you could estimate through probit the second equation. Because $Q$ depends on $e$, and $e$ is correlated with $u$, this assumption ...
Michael Gmeiner's user avatar
3 votes
Accepted

Can a subset of variables in a lower triangular Cholesky identification scheme be ordered arbitrarily if we do not care about their shocks?

You are right. Ordering a variable first reflects the identifying assumption that this variable will not respond contemporeneously to the other shocks in the system. You could obtain the exact same ...
Wecon's user avatar
  • 913
3 votes

Identifying assumption meaning

I think the best way how to explain this is to first quickly explain what identification actually is. As mentioned in this thread: For example, in the John Stachurski "A Primer in Econometric ...
1muflon1's user avatar
  • 55.5k
2 votes

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

Firstly, the diff-in-diff already is a fixed effects estimation. If you run a regression with FE and your time variant terms ($S_i*T_t$ and $T_t$) as in the plain and simple diff-in-diff setup, as ...
John Doe's user avatar
  • 423
1 vote

Identifying assumption meaning

"Identification" is the professional jargon in econometrics for "asserting that the outputs from an econometric model do indeed estimate what we want and declare that they estimate"...
Alecos Papadopoulos's user avatar
1 vote

Identification strategy for measuring impact of employee turnover on project quality

This looks challenging, and the following would only work in circumstances where: Reliable estimates can be made of how long each completed project should have taken to complete. Good records are ...
Adam Bailey's user avatar
  • 8,346
1 vote

Minimum sample size for cross-sectional RDD

I've run RDDs on similar sample sizes and got the paper accepted at a respectable conference. It's important to run McCrary Density Tests on your sample to look for people using knowledge on the ...
Pedro Cavalcante's user avatar
1 vote

What is the link between econometric theory and applied work?

I am not exactly sure what you're asking. So...I hope we both understand identification strategy to mean the same thing. If so: The identification strategy serves as the bedrock upon which you build ...
123's user avatar
  • 2,911
1 vote

What happens if the "control variables" are also endogenous?

As other posts have pointed out, endogenous regressors may contaminate all parameter estimates in regression when regressors are correlated. Moreover, it may seem difficult to conceive a situation ...
Murphy's user avatar
  • 59

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