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Informational Content Of Factor Structures In Simultaneous Discrete Response Models, Shakeeb Khan, Arnaud Maurel, Yichong Zhang

Research Collection School Of Economics

We study the informational content of factor structures in discrete triangular systems. Factor structures have been employed in a variety of settings in cross sectional and panel data models, and in this paper we attempt to formally quantify their informational content in a bivariate system often employed in the treatment effects literature. Our main findings are that under the factor structures often imposed in the literature, point identification of parameters of interest, such as both the treatment effect and the factor load, is attainable under weaker assumptions than usually required in these systems. For example, we show is that an …