NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
loading...

Mis-classified, Binary, Endogenous Regressors: Identification and Inference

Francis J. DiTraglia, Camilo García-Jimeno

NBER Working Paper No. 23814
Issued in September 2017
NBER Program(s):Technical Working Papers

This paper studies identification and inference for the effect of a mis-classified, binary, endogenous regressor when a discrete-valued instrumental variable is available. We begin by showing that the only existing point identification result for this model is incorrect. We go on to derive the sharp identified set under mean independence assumptions for the instrument and measurement error, and that these fail to point identify the effect of interest. This motivates us to consider alternative and slightly stronger assumptions: we show that adding second and third moment independence assumptions suffices to identify the model. We then turn our attention to inference. We show that both our model, and related models from the literature that assume regressor exogeneity, suffer from weak identification when the effect of interest is small. To address this difficulty, we exploit the inequality restrictions that emerge from our derivation of the sharp identified set under mean independence only. These restrictions remain informative irrespective of the strength of identification. Combining these with the moment equalities that emerge from our identification result, we propose a robust inference procedure using tools from the moment inequality literature. Our method performs well in simulations.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

Access to NBER Papers

You are eligible for a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.

E-mail:

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w23814

Users who downloaded this paper also downloaded* these:
Andrews and Oster w23826 Weighting for External Validity
Basu, Coe, and Chapman w23840 Comparing 2SLS vs 2SRI for Binary Outcomes and Binary Exposures
Stiglitz w23795 Where Modern Macroeconomics Went Wrong
Craig and Fryer w23811 Complementary Bias: A Model of Two-Sided Statistical Discrimination
García-Jimeno and Yildirim w23198 Matching Pennies on the Campaign Trail: An Empirical Study of Senate Elections and Media Coverage
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us