Chaisemartin, Clément de (2013) Defying the LATE? Identification of local treatment effects when the instrument violates monotonicity. Working Paper. Coventry, UK: University of Warwick, Department of Economics. Warwick economics research papers series (TWERPS), Volume 2013 (Number 1020).

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Abstract

The instrumental variable method relies on a strong "no-defiers" condition, which
requires that the instrument affect every subject's treatment decision in the same
direction. This paper shows that "no-defiers" can be replaced by a weaker "compliers-
defiers" condition, which requires that a subgroup of compliers have the same size and
the same distribution of potential outcomes as defiers. This condition is necessary and
sufficient for IV to capture causal effects for the remaining part of compliers. In many
applications, "compliers-defiers" is a very weak condition. For instance, in Angrist &
Evans (1998), 94% of DGPs compatible with the data satisfy "compliers-defiers", while
0% satisfy "no-defiers".

Item Type:	Working or Discussion Paper (Working Paper)
Subjects:	H Social Sciences > HB Economic Theory
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	Instrumental variables (Statistics), Econometrics , Economics, Mathematical
Series Name:	Warwick economics research papers series (TWERPS)
Publisher:	University of Warwick, Department of Economics
Place of Publication:	Coventry, UK
Official Date:	August 2013
Dates:	Date Event August 2013 Published
Volume:	Volume 2013
Number:	Number 1020
Number of Pages:	34
Institution:	University of Warwick
Status:	Not Peer Reviewed
Access rights to Published version:	Open Access (Creative Commons)
Funder:	Île-de-France (France)

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