This paper investigates the existence of a possible media bias by analyzing the impact of automobile manufacturer's advertisements on automobile reviews in a leading German car magazine. By accounting for both endogeneity and sample selection using a two-step procedure, we find a positive impact...

This paper develops a specification test for instrument validity in the heterogeneous treatment effect model with a binary treatment and a discrete instrument. The strongest testable implication for instrument validity is given by the condition for nonnegativity of point-identifiable complier's...

This paper discusses the nonparametric identification of causal direct and indirect effects of a binary treatment based on instrumental variables. We identify the indirect effect, which operates through a mediator (i.e. intermediate variable) that is situated on the causal path between the...

This paper proposes the Fixed Effects Filtered (FEF) and Fixed Effects Filtered instrumental variable (FEF-IV) estimators for estimation and inference in the case of time-invariant effects in static panel data models when N is large and T is fixed. It is shown that the FEF and FEF-IV estimators...

This paper investigates the nature of the IV method for tackling endogeneity. By tracing the rise and fall of the method in macroeconometrics and its subsequent revival in microeconometrics, it pins the method down to an implicit model respecification device - breaking the circular causality of...

We introduce a new "supply-push" instrument for foreign aid, to be used together with an instrumental variable estimator that filters out unobserved common factors. We use this instrument to study the effects of aid on macroeconomic ratios, and especially the ratios of consumption, investment,...

We analyze mortality and follow-up costs of heart attack patients using administrative data from Austria from 2002-2011. As treatment intensity in a hospital largely depends on whether it has a catheterization laboratory, we focus on the effects of patients' initial admission to these...