Syndicate content

instrumental variables

Judge leniency IV designs: Now not just for Crime Studies

David McKenzie's picture

For quite a few reasons, many researchers have become increasingly skeptical of a lot of attempts to use instrumental variables for causal estimation. However, one type of instrument that has enjoyed a surge in popularity is what is known as the “judge leniency” design. It has particularly caught my attention recently through a couple of applications where the judges are not actually court judges, and it seems like there could be quite a few other applications out there. I therefore thought I’d summarize this design, these recent applications, and key things to watch out for.

The basic judge leniency set-up.
This design appears to have gained first prominence through studies which look at the impact of different types of experience with the criminal legal system. A classic example is Kling (2006, AER), who wants to look at the impact of incarceration length (S) on subsequent labor outcomes (Y). That is, he would like to estimate an equation like:

Y(i) = a + bS(i) + c’X(i)+ e(i)

The concern, of course, is that even controlling for observable differences X(i), people who get longer prison sentences might be different from those who get given shorter sentences, in ways that matter for future labor earnings.

Rethinking identification under the Bartik Shift-Share Instrument

David McKenzie's picture
While it has been said that “friends don’t let friends use IV”, one exception has been the Bartik or shift-share instrument. Development economists tend to see these instruments used most in the trade and migration literatures, with Jaeger et al. (2018) noting that “it is difficult to overstate the importance of this instrument for research on immigration.

How has our rising palm oil consumption affected the communities where it comes from? Guest post by Ryan Edwards

Development Impact Guest Blogger's picture

This is the seventh in our series of posts by Ph.D. students on the job market this year
The tripling of area planted with tropical oil crops since the 1990s represents the largest transformation of global food and agricultural systems since the Green Revolution. The area planted for oil crops since the 1970s has expanded by over 150 million hectares, three times that of all cereal crops in the same period (Byerlee, Falcon, and Naylor, 2016). Tropical oil crops feature in most agricultural and food policy debates: genetically modified organisms, food versus biofuels, small farmers versus agribusiness, mono- versus inter-cropping, land grabs, and the environmental footprint of food consumption. The most prominent debates concern clearing forests across the tropics to plant oil crops, particularly oil palm, and the haze that regularly blankets Southeast Asia. Palm oil is the world’s most consumed vegetable oil—ubiquitous in everyday products from food and drink to soap and cosmetics—and one of the world’s most socially contested industries.