Instrumental Variables - an introduction

[cristianoruttico]

Hi ben, you literally saved my life, the world needs professor like you that are passionate about the subject, and have understand so deeply every detail so they can teach properly and in the easiest way also the most complicated things.

[SpartacanUsuals]

Hi, many thanks for your comment - much appreciated! If you have any ideas or suggestions of material you would like covered in videos then please let me know. Best, Ben

[flavianepomuceno]

Ben, as usual, you are saving me. Thank you for explaining so didactically the paper by Angrist (1990). That was extremely helpful.

[georgegao]

Hey Ben, have you ran an analysis for the effect of your videos on Econometrics scores? What instrument would you use for the dummy variable of whether the assessment was sat before or after the publishing date of your videos? Thanks heaps.

[TheGPFilmMaker]

Why does this only have 60k views! I've done advanced economic research but not for a while - needed a quick refresher for a new IV project I'm working on. This is perfect!

[SomethingSoOriginal]

Thanks man, really helpful for my econometric class

[GavConnn]

great video, very well explained without going into unnecessary detail.

[peytonfitzgerald]

When you refer to z=1 as being eligible for the draft do you mean that they were chosen for the draft? I'd imagine there are people who were eligible from a technical/regulatory stand point but z=0 for them as their random number wasn't chosen. If you can clarify here I would really appreciate your help!

[sumitkumarmaji]

Thank you for the lucid explanation. I have one doubt. After the 1st stage when the endogenous variable y2 hat is determined, in the second stage, can we use some more exogenous (Xi) variables? Why I'm asking, that some of the exogenous variables may not be related to Y2 but important for Y1. So can we included them later in the second stage???

[ericbecker]

Thank you so much for this video. It is especially helpful how you name the Angrist paper that was instrumental in this model's development, very helpful as a learner to have literature to refer to.

[ninitinka]

What process do you use to select an instrumental variable? I understand the concept that the IV should have a casual relationship with X but not Y, but how do you justify it?

[naznazz]

thank you so much
I am phd student in Iran I find your videos so helpful

[sharonmodiba]

Hi Mr Lambert, may i please request that you cover the lewbel IV method. thanks

[hellomoto]

Ignore this: hadn't got to the ratio bit yet! Will leave original question for reference.
I have a question - I understand that by ignoring those who participate in the military as volunteers we get rid of the correlation between the explanatory variable and the error term, but surely by assuming this we're omitting a variable, which is counter intuitive to the whole process? I mean, when the aim is trying to determine what impact military participation has on lifetime earnings, I get that OLS is problematic if military participation is correlated with, for example not liking office work, but how can we just ignore this (the first bar of the bar chart; people who don't win the lottery but volunteer any way) when using IV?

[bryvebasketball]

Literally the one thing my professor didn't explain well and it was half of my last midterm. Watching this going into the final

[MartinLichtblau]

So many others factors could be responsible for that phenomena, in so many different ways, with different intensities.
E.g. Educational level, pressure when winning the lottery, gambling mentality, believing in destiny, fixed mindset, ...
So those 16% young people joining military, after receiving the draft, are for sure people with certain specific characteristics, that's the reason why the followed the call. And those underyling characteristics could explain some share of the equation, not only the trauma caused by the military service.

[salomekuchukhidze]

Thank you so much! All your videos are incredibly clear and helpful!

[centreback]

Could you please explain again the relationship between the 16% and -$436 value. I didn't quite get it from the video. Thanks Ben :)

[faroru]

How do we know that the the first individual who was not eligible but participated in the war was going to earn less as an average of their lifetime earnings? How do we know this individual was always going to learn less?

[thesenate]

10 years later you were helpful to me internet is amazing
but how do we know if draft eligibility has nothing to do with other factors..