Nonparametric Bounds on Treatment Effects with Imperfect Instruments
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The Department of Economic Science was founded in 1898 to teach economic theory as a truth of industrial life, and was very much concerned with applying economics to business and industry, particularly agriculture. Between 1910 and 1967 it showed the growing influence of other social studies, such as sociology, history, and political science. Today it encompasses the majors of Agricultural Business (preparing for agricultural finance and management), Business Economics, and Economics (for advanced studies in business or economics or for careers in financing, management, insurance, etc).
History
The Department of Economic Science was founded in 1898 under the Division of Industrial Science (later College of Liberal Arts and Sciences); it became co-directed by the Division of Agriculture in 1919. In 1910 it became the Department of Economics and Political Science. In 1913 it became the Department of Applied Economics and Social Science; in 1924 it became the Department of Economics, History, and Sociology; in 1931 it became the Department of Economics and Sociology. In 1967 it became the Department of Economics, and in 2007 it became co-directed by the Colleges of Agriculture and Life Sciences, Liberal Arts and Sciences, and Business.
Dates of Existence
1898–present
Historical Names
- Department of Economic Science (1898–1910)
- Department of Economics and Political Science (1910-1913)
- Department of Applied Economics and Social Science (1913–1924)
- Department of Economics, History and Sociology (1924–1931)
- Department of Economics and Sociology (1931–1967)
Related Units
- College of Agricultural and Life Sciences (parent college)
- College of Liberal Arts and Sciences (parent college)
- College of Business (parent college)
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Abstract
This paper extends the identification results in Nevo and Rosen
(2012) to nonparametric models. We derive nonparametric bounds on the average
treatment effect when an imperfect instrument is available. As in Nevo and
Rosen (2012), we assume that the correlation between the imperfect instrument
and the unobserved latent variables has the same sign as the correlation
between the endogenous variable and the latent variables. We show that the
monotone treatment selection and monotone instrumental variable restrictions,
introduced by Manski and Pepper (2000, 2009), jointly imply this assumption.
We introduce the concept of comonotone instrumental variable, which also
satisfies this assumption. Moreover, we show how the assumption that the
imperfect instrument is less endogenous than the treatment variable can help
tighten the bounds. We also use the monotone treatment response assumption to
get tighter bounds. The identified set can be written in the form of
intersection bounds, which is more conducive to inference. We illustrate our
methodology using the National Longitudinal Survey of Young Men data to
estimate returns to schooling.