A note on testing instrument validity for the identification of LATE

Lukas Laffers, Giovanni Mellace

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

In this paper, we show that the testable implications derived in Huber and Mellace (Rev Econ Stat 97:398, 2015) are the best possible to detect invalid instruments in the presence of heterogeneous treatment effects and endogeneity. We also provide formal proof of the fact that those testable implications are only necessary, but not sufficient, conditions for instrument validity.
Original languageEnglish
JournalEmpirical Economics
Volume53
Issue number3
Pages (from-to)1281-1286
ISSN0377-7332
DOIs
Publication statusPublished - Nov 2017

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Endogeneity
Testing
Formal Proof
Treatment Effects
Necessary
Sufficient Conditions
Testing instrument
Heterogeneous treatment effects
Hub

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abstract = "In this paper, we show that the testable implications derived in Huber and Mellace (Rev Econ Stat 97:398, 2015) are the best possible to detect invalid instruments in the presence of heterogeneous treatment effects and endogeneity. We also provide formal proof of the fact that those testable implications are only necessary, but not sufficient, conditions for instrument validity.",
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A note on testing instrument validity for the identification of LATE. / Laffers, Lukas; Mellace, Giovanni.

In: Empirical Economics, Vol. 53, No. 3, 11.2017, p. 1281-1286.

Research output: Contribution to journalJournal articleResearchpeer-review

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AB - In this paper, we show that the testable implications derived in Huber and Mellace (Rev Econ Stat 97:398, 2015) are the best possible to detect invalid instruments in the presence of heterogeneous treatment effects and endogeneity. We also provide formal proof of the fact that those testable implications are only necessary, but not sufficient, conditions for instrument validity.

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