Instrumental variables I: instrumental variables exploit natural variation in nonexperimental data to estimate causal relationships

Beliefs and actions in the trust game: Creating instrumental variables to estimate the causal e¤ect1

In many economic contexts, an elusive variable of interest is the agent’s expectation about relevant events, e.g. about other agents’behavior. Recent experimental studies as well as surveys have asked participants to state their beliefs explicitly, but little is known about the causal relation between beliefs and other behavioral variables. This paper discusses the possibility of creating exoge...

Beliefs and actions in the trust game: Creating instrumental variables to estimate the causal effect

In many economic contexts, an elusive variable of interest is the agent’s belief about relevant events, e.g. about other agents’ behavior. A growing number of surveys and experiments ask participants to state beliefs explicitly but little is known about the causal relation between beliefs and other behavioral variables. This paper discusses the possibility of creating exogenous instrumental var...

An Introduction to Instrumental Variables

Instrumental variables (IVs) are used to control for confounding and measurement error in observational studies. They allow for the possibility of making causal inferences with observational data. Like propensity scores, IVs can adjust for both observed and unobserved confounding effects. Other methods of adjusting for confounding effects, which include stratification, matching and multiple reg...

Ecological Inferencewith Instrumental Variables

This note observes that instrumental variables techniques are useful not only for estimating causal effects, but that they simultaneously solve the ecological inference problem. ∗Correspondence can be addressed to the author at MEDS Department, Kellogg School of Management, 2001 Sheridan Rd, Evanston, IL 60208, or by email: [email protected]. The ecological inference problem i...

Mediating Instrumental Variables