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Instrumental Variables
“An external source of variation can isolate part of an exposure, if demanding conditions hold.”
01 / SUMMARY
In short
An instrument must affect exposure, be suitably separated from causes of the outcome, and affect that outcome only through exposure within the framework. Extra assumptions may identify local effects.
03 / SCENE
In the wild
An access lottery can instrument receipt of a program even when winning does not guarantee participation.
04 / LIMIT
The limit
Predicting treatment is not enough; the exclusion restriction is often hard to verify directly.
FINAL NOTE
What remains
State every instrument assumption and the population to which the estimate applies.