Weak instrumental variables due to nonlinearities in panel data: A Super Learner Control Function estimator
NeutralArtificial Intelligence
The recent study published on arXiv presents the Super Learner Control Function (SLCF) estimator, which addresses the challenges posed by weak instrumental variables in panel data models. It emphasizes that when the relationship between endogenous covariates and instrumental variables is nonlinear, traditional linear models may yield weak instruments, compromising the validity of causal inferences. The proposed SLCF estimator utilizes a triangular structural panel data model with additive separable individual-specific effects, combining linear and nonlinear approaches to enhance estimation accuracy. This innovation is particularly significant in fields where understanding causal relationships is essential, as it allows for better handling of unobservable confounders. By employing exclusion restrictions and a control function approach, the SLCF estimator aims to provide more reliable estimates of structural parameters, thereby advancing the methodology in econometrics and related discip…
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