Linear instrumental variable estimators, such as two-stage least squares (TSLS), are commonly interpreted as estimating positively weighted averages of causal effects, referred to as local average treatment effects (LATEs). We examine whether the LATE interpretation actually applies to the types...

This paper used Reiterative Truncated Projected Least Squares (RTPLS) to estimate the effects on life expectancy of an additional dollar of insurance premiums for 43 countries. The data shows a clear positive relationship between insurance and life expectancy with insurance premiums increasing...

This study investigates whether energy prices and macroeconomic indicators are determinants of the European Union Allowance (EUA) prices and how their relationships changed in phase III of the European Union Emission Trading Schema (EU ETS). An innovative application of the partial least squares...

We develop an “omitted variable bias” framework for sensitivity analysis of instrumental variable (IV) estimates that is immune to “weak instruments,” naturally handles multiple “side-effects” (violations of the exclusion restriction assumption) and “confounders” (violations of...

Textbook theory predicts that t-ratios decline towards zero in regressions when there is collinearity between two regressors. This paper shows that this often does not occur if the regression suffers from simultaneity or omitted variable bias. With more collinearity, t-ratios generally increase...