A note on testing instrument validity for the identification of LATE

Lafférs, Lukáš, 1986-

A note on testing instrument validity for the identification of LATE / Lukáš Lafférs, Giovanni Mellace. -- In this paper, we show that the testable implications derived in Huber and Mellace (Rev Econ Stat 97:398, 2015) are the best possible to detect invalid instruments in the presence of heterogeneous treatment effects and endogeneity. We also provide formal proof of the fact that those testable implications are only necessary, but not sufficient, conditions for instrument validity

In Empirical Economics. -- Heidelberg : Physica-Verlag, 2017. -- ISSN 0377-7332. -- ISSN 1435-8921. -- Vol. 53, no. 3 (2017), pp. 1281-1286