Instrumental Variable Estimation of the Simple Errors-in-Variables Model

Abstract

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Commuting, Migration, and Rural‐Urban Population Dynamics

“…The very nature of their construction renders it likely that unobservable measurement error is embedded in at least some observations on these variables. So long as the chosen instruments for the error-ridden variables are correlated with the true independent variable but uncorrelated with measurement error, the resulting parameter estimates will be consistent (Carter and Fuller, 1980). Finally, residuals plots indicate that even after normalizing the commuting and migration variables by county population, errors vary systematically with the magnitude of commuting flows.…”

Proxying for Unobservable Variables With Internet Document-Frequency

“…More generally, document-frequency proxies can be used to complement other data sources in a wide array of more sophisticated econometric approaches to inference, including errors-in-variables IV (Carter and Fuller 1980); using multiple proxies as simultaneous controls (Lubotsky and Wittenberg 2006); Bayesian multiple imputation (Rubin 1996); and in structural equations with latent variable approaches (Bollen 1989).…”

An Overview of Normal Theory Structural Measurement Error Models

“…Carter & Fuller (1980) discuss instrumental variable estimation and its properties in the simple ME model with slightly more restrictive assumptions. The reason for their more restrictive assumptions, as alluded to above, is to allow for the estimation of all unknown parameters in the model.…”