The Fed – Correcting for Endogeneity in Models with Bunching

September 2020

Correcting for Endogeneity in Models with Bunching

Carolina Caetano, Gregorio Caetano, & Eric Nielsen

Abstract:

We show that in models with endogeneity, bunching at the lower or upper boundary of the distribution of the treatment variable may be used to build a correction for endogeneity. We derive the asymptotic distribution of the parameters of the corrected model, provide an estimator of the standard errors, & prove the consistency of the bootstrap. An empirical application reveals that time spent watching television, corrected for endogeneity, has roughly no net effect on cognitive skills & a significant negative net effect on non-cognitive skills in children.

DOI: https://doi.org/10.17016/FEDS.2020.080

PDF:
Full Paper



Back to Top

Last Update:
September 18, 2020

Source: Federal Reserves

Content compilation technical supported by
SEO Press Release
,Topic News PR – professional press release distribution in Japan, Korea, China, Taiwan & Asia world

Leave a Reply

Your email address will not be published. Required fields are marked *