title: An instrumental variable random-coefficients model for binary outcomes.
abstract: In this paper, we study a random-coefficients model for a binary outcome. We allow for the possibility that some or even all of the explanatory variables are arbitrarily correlated with the random coefficients, thus permitting endogeneity. We assume the existence of observed instrumental variablesZthat are jointly independent with the random coefficients, although we place no structure on the joint determination of the endogenous variableXand instrumentsZ, as would be required for a control function approach. The model fits within the spectrum of generalized instrumental variable models, and we thus apply identification results from our previous studies of such models to the present context, demonstrating their use. Specifically, we characterize the identified set for the distribution of random coefficients in the binary response model with endogeneity via a collection of conditional moment inequalities, and we investigate the structure of these sets by way of numerical illustration.
authors: Centre for Microdata Methods and Practice, Institute for Fiscal Studies 7 Ridgmount Street, London, WC1E 7AE, UK ; Department of Economics, University College London Gower Street, London, WC1E 6BT, UK.
authors: Andrew
authors: A
authors: Chesher
authors: Centre for Microdata Methods and Practice, Institute for Fiscal Studies 7 Ridgmount Street, London, WC1E 7AE, UK ; Department of Economics, University College London Gower Street, London, WC1E 6BT, UK.
authors: Adam M
authors: AM
authors: Rosen
keywords: Endogeneity; Incomplete models; Instrumental variables; Partial identification; Random coefficients; Random sets; Set identification