Direct and indirect treatment effects: Causal chains and mediation analysis with instrumental variables
Type
working paper
Date Issued
2014
Author(s)
Abstract
This paper discusses the nonparametric identification of causal direct and indirect effects of a binary treatment based on instrumental variables. We identify the indirect effect, which operates through a mediator (i.e. intermediate variable) that is situated on the causal path between the treatment and the outcome, as well as the unmediated direct effect of the treatment using distinct instruments for the endogenous treatment and the endogenous mediator. We examine different settings to obtain nonparametric identification of (natural) direct and indirect as well as controlled direct effects for continuous and discrete mediators and continuous and discrete instruments. We illustrate our approach in two applications: to disentangle the effects (i) of education on health, which may be mediated by income, and (ii) of the Job Corps training program, which may affect earnings indirectly via working longer hours and directly via higher wages per hour.
Language
English
Keywords
direct effect
indirect effect
instrument
treatment effects.
HSG Classification
contribution to scientific community
HSG Profile Area
SEPS - Quantitative Economic Methods
Refereed
No
Publisher
SEPS
Subject(s)
Division(s)
Eprints ID
232516
File(s)![Thumbnail Image]()
Name
dp8280.pdf
Size
393.94 KB
Format
Adobe PDF
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