Qian, Hang (2011): Bayesian inference with monotone instrumental variables.

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Abstract
Sampling variations complicate the classical inference on the analogue bounds under the monotone instrumental variables assumption, since point estimators are biased and confidence intervals are difficult to construct. From the Bayesian perspective, a solution is offered in this paper. Using a conjugate Dirichlet prior, we derive some analytic results on the posterior distribution of the two bounds of the conditional mean response. The bounds of the unconditional mean response and the average treatment effect can be obtained with Bayesian simulation techniques. Our Bayesian inference is applied to an empirical problem which quantifies the effects of taking extra classes on high school students' test scores. The two MIVs are chosen as the education levels of their fathers and mothers. The empirical results suggest that the MIV assumption in conjunction with the monotone treatment response assumption yield good identification power.
Item Type:  MPRA Paper 

Original Title:  Bayesian inference with monotone instrumental variables 
Language:  English 
Keywords:  Monotone instrumental variables; Bayesian; Dirichlet 
Subjects:  C  Mathematical and Quantitative Methods > C3  Multiple or Simultaneous Equation Models; Multiple Variables > C31  CrossSectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models C  Mathematical and Quantitative Methods > C1  Econometric and Statistical Methods and Methodology: General > C11  Bayesian Analysis: General 
Item ID:  32672 
Depositing User:  Hang Qian 
Date Deposited:  08. Aug 2011 15:45 
Last Modified:  16. Feb 2013 05:45 
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URI:  http://mpra.ub.unimuenchen.de/id/eprint/32672 