de Chaisemartin, Clement (2017) Tolerating defiance? Local average treatment effects without monotonicity. Quantitative Economics, 8 (2). pp. 367-396. doi:10.3982/QE601

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Abstract

Instrumental variables (IVs) are commonly used to estimate the effects of some treatments. A valid IV should be as good as randomly assigned, it should not have a direct effect on the outcome, and it should not induce any unit to forgo treatment. This last condition, the so‐called monotonicity condition, is often implausible. This paper starts by showing that actually, IVs are still valid under a weaker condition than monotonicity. It then derives conditions that are sufficient for this weaker condition to hold and whose plausibility can easily be assessed in applications. It finally reviews several applications where this weaker condition is applicable while monotonicity is not. Overall, this paper extends the applicability of the IV estimation method.

Item Type:	Journal Article
Subjects:	H Social Sciences > HB Economic Theory Q Science > QA Mathematics
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	Monotonic functions , Instrumental variables (Statistics) , Econometrics, Economics -- Mathematical models
Journal or Publication Title:	Quantitative Economics
Publisher:	Econometric Society
ISSN:	1759-7323
Official Date:	July 2017
Dates:	Date Event July 2017 Published 28 July 2017 Available 18 October 2016 Accepted
Volume:	8
Number:	2
Page Range:	pp. 367-396
DOI:	10.3982/QE601
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Open Access

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