Tighter bounds in triangular systems

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Abstract

We study a nonparametric triangular system with (potentially discrete) endogenous regressors and nonseparable errors. Like in other work in this area, the parameter of interest is the structural function evaluated at particular values. We impose a global exclusion and exogeneity condition, in contrast to Chesher (2005), but develop a rank condition which is weaker than Chesher's. The alternative rank condition can be satisfied for binary endogenous regressors, and it often leads to an identified interval tighter than Chesher (2005)'s minimum length interval. We illustrate the potential of the new rank condition using the Angrist and Krueger (1991) data.

Original languageEnglish (US)
Pages (from-to)122-128
Number of pages7
JournalJournal of Econometrics
Volume161
Issue number2
DOIs
StatePublished - Apr 1 2011

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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