Salvaging Falsified Instrumental Variable Models

S-Tier
Journal: Econometrica
Year: 2021
Volume: 89
Issue: 3
Pages: 1449-1469

Score contribution per author:

4.022 = (α=2.01 / 2 authors) × 4.0x S-tier

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

Abstract

What should researchers do when their baseline model is falsified? We recommend reporting the set of parameters that are consistent with minimally nonfalsified models. We call this the falsification adaptive set (FAS). This set generalizes the standard baseline estimand to account for possible falsification. Importantly, it does not require the researcher to select or calibrate sensitivity parameters. In the classical linear IV model with multiple instruments, we show that the FAS has a simple closed‐form expression that only depends on a few 2SLS coefficients. We apply our results to an empirical study of roads and trade. We show how the FAS complements traditional overidentification tests by summarizing the variation in estimates obtained from alternative nonfalsified models.

Technical Details

RePEc Handle
repec:wly:emetrp:v:89:y:2021:i:3:p:1449-1469
Journal Field
General
Author Count
2
Added to Database
2026-01-25