Using Matching, Instrumental Variables, and Control Functions to Estimate Economic Choice Models

This paper investigates four topics. (1) It examines the different roles played by the propensity score (the probability of selection into treatment) in matching, instrumental variable, and control function methods. (2) It contrasts the roles of exclusion restrictions in matching and selection model...

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Veröffentlicht in:The review of economics and statistics 2004-02, Vol.86 (1), p.30-57
Hauptverfasser: Heckman, James, Navarro-Lozano, Salvador
Format: Artikel
Sprache:eng
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Zusammenfassung:This paper investigates four topics. (1) It examines the different roles played by the propensity score (the probability of selection into treatment) in matching, instrumental variable, and control function methods. (2) It contrasts the roles of exclusion restrictions in matching and selection models. (3) It characterizes the sensitivity of matching to the choice of conditioning variables and demonstrates the greater robustness of control function methods to misspecification of the conditioning variables. (4) It demonstrates the problem of choosing the conditioning variables in matching and the failure of conventional model selection criteria when candidate conditioning variables are not exogenous in a sense defined in this paper.
ISSN:0034-6535
1530-9142
DOI:10.1162/003465304323023660