Better LATE

Better LATE - NBER WORKING PAPER SERIES BETTER LATE THAN...

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Unformatted text preview: NBER WORKING PAPER SERIES BETTER LATE THAN NOTHING: SOME COMMENTS ON DEATON (2009) AND HECKMAN AND URZUA (2009) Guido W. Imbens Working Paper 14896 http://www.nber.org/papers/w14896 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 April 2009 I have benefitted from discussions with Joshua Angrist, Susan Athey, Abhijit Banerjee, David Card, Gary Chamberlain, Esther Duflo, Kei Hirano, Geert Ridder, Chuck Manski, Sendhil Mullainathan, and Jeffrey Wooldridge, although they bear no responsibility for any of the views expressed here. Financial support for this research was generously provided through NSF grant 0820361. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research. © 2009 by Guido W. Imbens. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source. Better LATE Than Nothing: Some Comments on Deaton (2009) and Heckman and Urzua (2009) Guido W. Imbens NBER Working Paper No. 14896 April 2009 JEL No. C10,C50,C90 ABSTRACT Two recent papers, Deaton (2009), and Heckman and Urzua (2009), argue against what they see as an excessive and inappropriate use of experimental and quasi-experimental methods in empirical work in economics in the last decade. They specifically question the increased use of instrumental variables and natural experiments in labor economics, and of randomized experiments in development economics. In these comments I will make the case that this move towards shoring up the internal validity of estimates, and towards clarifying the description of the population these estimates are relevant for, has been important and beneficial in increasing the credibility of empirical work in economics. I also address some other concerns raised by the Deaton and Heckman-Urzua papers. Guido W. Imbens Department of Economics Littauer Center Harvard University 1805 Cambridge Street Cambridge, MA 02138 and NBER [email protected] 1 Introduction Two recent papers, Deaton (2009; Deaton from hereon), and Heckman and Urzua (2009; HU from hereon), argue against what they see as an excessive and inappropriate use of experimental and quasi-experimental methods in empirical work in economics in the last decade. 1 Deaton and HU reserve much of their scorn for the local average treatment effect (LATE) introduced in the econometric literature by Imbens and Angrist (1994; IA from hereon). HU write: “Problems of identification and interpretation are swept under the rug and replaced by ‘an effect’ identified by IV that is often very difficult to interpret as an answer to an interesting economic question,” (HU, page 19). Deaton writes: “The LATE may, or may not, be a parameter of interest ... and in general, there is no reason to suppose that it will be. ... I find it hard to make any sense of the LATE. ... This goesto suppose that it will be....
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This note was uploaded on 12/26/2011 for the course ECON 245a taught by Professor Staff during the Fall '08 term at UCSB.

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Better LATE - NBER WORKING PAPER SERIES BETTER LATE THAN...

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