American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
The Trade-Off between Flexibility and Robustness in Instrumental Variables Analysis
American Economic Review
(pp. 3975–98)
Abstract
In additive instrumental variables models, the robustness to some failure of instrumental validity or additive separability depends on the strength of a priori restrictions on the structural relationship between outcomes and treatments. I provide theoretical analysis of the problem, discuss the implications for empirical practice, and demonstrate with a numerical study calibrated on real-world data.Citation
Deaner, Ben. 2025. "The Trade-Off between Flexibility and Robustness in Instrumental Variables Analysis." American Economic Review 115 (11): 3975–98. DOI: 10.1257/aer.20231765Additional Materials
JEL Classification
- C26 Single Equation Models: Single Variables: Instrumental Variables (IV) Estimation
- G51 Household Finance: Household Saving, Borrowing, Debt, and Wealth
- H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
- J13 Fertility; Family Planning; Child Care; Children; Youth