Comparing IV With Structural Models: What Simple IV Can and Cannot Identify.
This paper compares the economic questions addressed by instrumental variables estimators with those addressed by structural approaches. We discuss Marschak's Maxim: estimators should be selected on the basis of their ability to answer well-posed economic problems with minimal assumptions. A key identifying assumption that allows structural methods to be more informative than IV can be tested with data and does not have to be imposed.
Heckman
James J
JJ
University of Chicago, University College Dublin, Cowles Foundation, Yale University, and the American Bar Foundation.
Urzúa
Sergio
S