Abstract
We examine the use of instrumental variable (IV) methods to measure the effect of a ceteris paribus change in an endogenous variable on an ordered outcome. Specifically, we use these methods to investigate the effect of neighborhood characteristics on subjective well-being (SWB) among participants in the Moving to Opportunity (MTO) housing voucher experiment. We find that the estimated positive effect of a decrease in neighborhood poverty on SWB is sensitive to the specification of the first stage auxiliary equation for endogenous neighborhood poverty. Our results highlight the influential role of control function restrictions in complete triangular models.
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© 2023 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology
2023
The President and Fellows of Harvard College and the Massachusetts Institute of Technology
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