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IZA Discussion Paper No. 11426
March 2018
On the Estimation of Treatment Effects with Endogenous Misreporting

published in: Journal of Econometrics, 2019, 208 (2), 487 - 506

Participation in social programs is often misreported in survey data, complicating the estimation of the effects of those programs. In this paper, we propose a model to estimate treatment effects under endogenous participation and endogenous misreporting. We show that failure to account for endogenous misreporting can result in the estimate of the treatment effect having an opposite sign from the true effect. We present an expression for the asymptotic bias of both OLS and IV estimators and discuss the conditions under which sign reversal may occur. We provide a method for eliminating this bias when researchers have access to information related to both participation and misreporting. We establish the consistency and asymptotic normality of our estimator and assess its small sample performance through Monte Carlo simulations. An empirical example is given to illustrate the proposed method.

Kommunikation
Mark Fallak
mark.fallak@liser.lu
+352 585-855-526
World of Labour
Olga Nottmeyer
olga.nottmeyer@liser.lu
+352 585-855-501
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Christina Gathmann
christina.gathmann@liser.lu

Das IZA@LISER-Netzwerk ist eine weltweite Gemeinschaft für exzellente Forschung in der Arbeitsmarktökonomie und angrenzenden Fachgebieten. Nach dem Wechsel von Bonn wird das Netzwerk nun am Luxembourg Institute of Socio-Economic Research (LISER) koordiniert.

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