TY  - RPRT
        AU  - Khan, Shakeeb
AU  - Maurel, Arnaud
AU  - Zhang, Yichong
        TI  - Informational Content of Factor Structures in Simultaneous Binary Response Models
        PY  - 2020/Dec/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 14008
        UR  - https://www.iza.org/index.php/publications/dp14008
        AB  - We study the informational content of factor structures in discrete triangular systems. Factor structures have been employed in a variety of settings in cross sectional and panel data models, and in this paper we formally quantify their identifying power in a bivariate system often employed in the treatment effects literature. Our main findings are that imposing a factor structure yields point identification of parameters of interest, such as the coefficient associated with the endogenous regressor in the outcome equation, under weaker assumptions than usually required in these models. In particular, we show that a "non-standard" exclusion restriction that requires an explanatory variable in the outcome equation to be excluded from the treatment equation is no longer necessary for identification, even in cases where all of the regressors from the outcome equation are discrete. We also establish identification of the coefficient of the endogenous regressor in models with more general factor structures, in situations where one has access to at least two continuous measurements of the common factor.
        KW  - discrete choice
KW  - factor structures
KW  - causal effects
        ER  -