Journal article

On the Plausibility of the Latent Ignorability Assumption

BP2-STS

  • 09.12.2021
Published in:
  • Econometrics. - MDPI AG. - 2021, vol. 9, no. 47, p. 1-6
English The estimation of the causal effect of an endogenous treatment based on an instrumental variable (IV) is often complicated by the non-observability of the outcome of interest due to attrition, sample selection, or survey non-response. To tackle the latter problem, the latent ignorability (LI) assumption imposes that attrition/sample selection is independent of the outcome conditional on the treatment compliance type (i.e., how the treatment behaves as a function of the instrument), the instrument, and possibly further observed covariates. As a word of caution, this note formally discusses the strong behavioral implications of LI in rather standard IV models. We also provide an empirical illustration based on the Job Corps experimental study, in which the sensitivity of the estimated program effect to LI and alternative assumptions about outcome attrition is investigated.
Faculty
Faculté des sciences économiques et sociales et du management
Department
Département d'économie politique
Language
  • English
Classification
Economics
License
CC BY
Open access status
gold
Identifiers
Persistent URL
https://folia.unifr.ch/unifr/documents/325139
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