Unordered Monotonicity
James J. Heckman, Rodrigo Pinto
Econometrica · 2018 · Volume 86 · Issue 1
Abstract
This paper defines and analyzes a new monotonicity condition for the identification of counterfactuals and treatment effects in unordered discrete choice models with multiple treatments, heterogeneous agents, and discrete-valued instruments.Unordered monotonicityimplies and is implied by additive separability of choice of treatment equations in terms of observed and unobserved variables. These results follow from properties of binary matrices developed in this paper. We investigate conditions under which unordered monotonicity arises as a consequence of choice behavior. We characterize IV estimators of counterfactuals as solutions to discrete mixture problems.
Keywords
Instrumental variables, monotonicity, revealed preference, Generalized Roy model, binary matrices, discrete choice, selection bias, identification, discrete mixtures
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