Working Paper

Identification in additive error models with discrete endogenous variables

Authors

Andrew Chesher

Published Date

5 September 2004

Type

Working Paper (CWP11/04)

In additive error models with a discrete endogenous variable identification cannot be achieved under a marginal covariation condition when the support of instruments is sparse relative to the support of the endogenous variable.

An iterated covariation condition with a weak montonicity restriction is shown to have set identifying power.