Open Access. Powered by Scholars. Published by Universities.®
- Discipline
Articles 1 - 4 of 4
Full-Text Articles in Econometrics
Formal Covariate Benchmarking To Bound Omitted Variable Bias, Deepankar Basu
Formal Covariate Benchmarking To Bound Omitted Variable Bias, Deepankar Basu
Economics Department Working Paper Series
Covariate benchmarking is an important part of sensitivity analysis about omitted variable bias and can be used to bound the strength of the unobserved confounder using information and judgments about observed covariates. It is common to carry out formal covariate benchmarking after residualizing the unobserved confounder on the set of observed covariates. In this paper, I explain the rationale and details of this procedure. I clarify some important details of the process of formal covariate benchmarking and highlight some of the difficulties of interpretation that researchers face in reasoning about the residualized part of unobserved confounders. I explain all the …
The Yule-Frisch-Waugh-Lovell Theorem For Linear Instrumental Variables Estimation, Deepankar Basu
The Yule-Frisch-Waugh-Lovell Theorem For Linear Instrumental Variables Estimation, Deepankar Basu
Economics Department Working Paper Series
In this paper, I discuss three aspects of the Frisch-Waugh-Lovell theorem. First, I show that the theorem holds for linear instrumental variables estimation of a multiple regression model that is either exactly or overidentified. I show that with linear instrumental variables estimation: (a) coefficients on endogenous variables are identical in full and partial (or residualized) regressions; (b) residual vectors are identical for full and partial regressions; and (c) estimated covariance matrices of the coefficient vectors from full and partial regressions are equal (up to a degree of freedom correction) if the estimator of the error vector is a function only …
Alternative Approaches To Labor Values And Prices Of Production: Theory And Evidence, Deepankar Basu, Athanasios Moraitis
Alternative Approaches To Labor Values And Prices Of Production: Theory And Evidence, Deepankar Basu, Athanasios Moraitis
Economics Department Working Paper Series
In this paper, we discuss three approaches to estimating classical prices of production(long run equilibrium prices) in both a circulating capital model and a model that includes capital stock: the Standard Interpretation of Marx’s value theory, the New Interpretation of Marx’s value theory, and the Sraffian approach to prices of production. We add two refinements to both models: (a) allowing for differential wages rates across industries; and(b) taking account of unproductive industries in labor value calculations. We implement(a) the circulating capital models using harmonized input-output data from the World Input Output Database for 37 countries for the period 2000–2014, and …
Covariate Benchmarking For Sensitivity Analysis When The Confounder Is Correlated With Observed Covariates, Deepankar Basu
Covariate Benchmarking For Sensitivity Analysis When The Confounder Is Correlated With Observed Covariates, Deepankar Basu
Economics Department Working Paper Series
Covariate benchmarking is an important part of sensitivity analysis about omitted variable bias and can be used to bound the strength of the unobserved confounder using information and judgments about observed covariates. It is common to carry out formal covariate benchmarking under the assumption that the unobserved confounder is orthogonal to the observed covariates. This assumption is restrictive and will be difficult to defended in most empirical analyses. In this paper I show that relaxing the orthogo- nality assumption leads to a breakdown of a recently proposed innovative formal covariate benchmarking methodology.