It is never too LATE: a new look at local average treatment effects with or without defiers

Christian M Dahl, Martin Huber, Giovanni Mellace*

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review


In heterogeneous treatment effect models with endogeneity, identification of the local average treatment effect (LATE) typically relies on the availability of an exogenous instrument monotonically related to treatment participation. First, we demonstrate that a strictly weaker local monotonicity condition—invoked for specific potential outcome values rather than globally—identifies the LATEs on compliers and defiers. Second, we show that our identification results apply to subsets of compliers and defiers when imposing an even weaker local compliers-defiers assumption that allows for both types at any potential outcome value. We propose estimators that are potentially more efficient than two-stage least squares (2SLS) in finite samples, even in cases where 2SLS is consistent. Finally, we provide an empirical application to estimating returns to education using the quarter of birth instrument.

Original languageEnglish
JournalThe Econometrics Journal
Issue number3
Pages (from-to)378-404
Publication statusPublished - Sept 2023

Bibliographical note


  • IV
  • LATE
  • causal effects
  • local CD
  • local monotonicity
  • principal stratification


Dive into the research topics of 'It is never too LATE: a new look at local average treatment effects with or without defiers'. Together they form a unique fingerprint.

Cite this