Understanding Instrumental Variables in Models with Essential Heterogeneity
Understanding Instrumental Variables in Models with Essential Heterogeneity
This paper examines the properties of instrumental variables (IV) applied to models with essential heterogeneity, that is, models where responses to interventions are heterogeneous and agents adopt treatments (participate in programs) with at least partial knowledge of their idiosyncratic response. We analyze two-outcome and multiple-outcome models, including ordered and unordered …