Weighting Estimators of the Local Average Treatment Effect
Abadie's Kappa and Weighting Estimators of the Local Average Treatment Effect
We study the finite sample and asymptotic properties of various weighting estimators of the local average treatment effect (late), several of which are based on the kappa theorem.Our framework presumes a binary endogenous explanatory variable and a binary instrumental variable, which may only be valid after conditioning on additional covariates.We argue that one of the abadie estimators, which we show is weight normalized, is likely to dominate the others in many contexts.A notable exception is in settings with one-sided noncompliance, where certain unnormalized estimatorshave the advantage of being based on a denominator that is bounded away from zero.We use a simulation study and three empirical applications to illustrate our findings.
