Identification and Identification Failure for Treatment Effects Using Structural Systems

Halbert White, K. Chalak

Research output: Contribution to journalArticlepeer-review

Abstract

We provide necessary and sufficient conditions for effect identification, thereby characterizing the limits to identification. Our results link the nonstructural potential outcome framework for identifying and estimating treatment effects to structural approaches in economics. This permits economic theory to be built into treatment effect methods. We elucidate the sources and consequences of identification failure by examining the biases arising when the necessary conditions fail, and we clarify the relations between unconfoundedness, conditional exogeneity, and the necessary and sufficient identification conditions. A new quantity, the exogeneity score, plays a central role in this analysis, permitting an omitted variable representation for effect biases. This analysis also provides practical guidance for selecting covariates and insight into the price paid for making various identifying assumptions and the benefits gained.
Original languageEnglish
Pages (from-to)273-317
Number of pages45
JournalEconometric Reviews
Volume32
Issue number3
DOIs
Publication statusPublished - Jan 2013

Keywords

  • Conditional exogeneity
  • Covariate selection
  • Exogeneity score
  • Nonparametric estimation
  • Simultaneous equations
  • Structural equations
  • Treatment effects
  • Unconfoundedness

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