Identification of a Triangular Two Equation System Without Instruments

A-Tier
Journal: Journal of Business & Economic Statistics
Year: 2024
Volume: 42
Issue: 1
Pages: 14-25

Score contribution per author:

1.341 = (α=2.01 / 3 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We show that a standard linear triangular two equation system can be point identified, without the use of instruments or any other side information. We find that the only case where the model is not point identified is when a latent variable that causes endogeneity is normally distributed. In this nonidentified case, we derive the sharp identified set. We apply our results to Acemoglu and Johnson’s model of life expectancy and GDP, obtaining point identification and comparable estimates to theirs, without using their (or any other) instrument.

Technical Details

RePEc Handle
repec:taf:jnlbes:v:42:y:2024:i:1:p:14-25
Journal Field
Econometrics
Author Count
3
Added to Database
2026-01-25