NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Structural Equations, Treatment Effects and Econometric Policy Evaluation

James J. Heckman, Edward Vytlacil

NBER Working Paper No. 11259
Issued in April 2005
NBER Program(s):   ED   LS   PE   CH

This paper uses the marginal treatment effect (MTE) to unify the nonparametric literature on treatment effects with the econometric literature on structural estimation using a nonparametric analog of a policy invariant parameter; to generate a variety of treatment effects from a common semiparametric functional form; to organize the literature on alternative estimators; and to explore what policy questions commonly used estimators in the treatment effect literature answer. A fundamental asymmetry intrinsic to the method of instrumental variables is noted. Recent advances in IV estimation allow for heterogeneity in responses but not in choices, and the method breaks down when both choice and response equations are heterogeneous in a general way.

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Document Object Identifier (DOI): 10.3386/w11259

Published: Heckman, James J. and Edward Vytlacil. "Structural Equations, Treatment Effects, And Econometric Policy Evaluation," Econometrica, v73(3,May), 2005, 669-738.

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