Working Paper

Instrumental variables, local instrumental variables and control functions


Jean-Pierre Florens, James Heckman, Costas Meghir, Edward Vytlacil

Published Date

5 July 2002


Working Paper (CWP15/02)

We consider the identification of the average treatment effect in models with continuous endogenous variables whose impact is heterogeneous. We derive a testable restriction that allows us to assess the degree of unobserved heterogeneity. Our analysis uses assumptions relating to the Local Instrumental Variables (LIV) approach and the control function approach.