Sensitivity Analysis for Instrumental Variables Under Joint Relaxations of Monotonicity and Independence
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arXiv
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| Format: | Preprint |
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2026
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| _version_ | 1866914431297912832 |
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| author | Picchetti, Pedro |
| author_facet | Picchetti, Pedro |
| contents | In this paper I develop a breakdown frontier approach to assess the sensitivity of Local Average Treatment Effects (LATE) estimates to violations of monotonicity and independence of the instrument. I parametrize violations of independence using the concept of $c$-dependence from Masten & Poirier (2018) and allow for the share of defiers to be greater than zero but smaller than the share of compliers. I derive identified sets for the LATE and the Average Treatment Effect (ATE) in which the bounds are functions of these two sensitivity parameters. Using these bounds, I derive the breakdown frontier for the LATE, which is the weakest set of assumptions such that a conclusion regarding the LATE holds. I derive consistent sample analogue estimators for the breakdown frontiers and provide a valid bootstrap procedure for inference. Monte Carlo simulations show the desirable finite-sample properties of the estimators and an empirical application shows that the conclusions regarding the effect of family size on unemployment from Angrist & Evans (1998) are highly sensitive to violations of independence and monotonicity. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2603_25529 |
| institution | arXiv |
| publishDate | 2026 |
| record_format | arxiv |
| spellingShingle | Sensitivity Analysis for Instrumental Variables Under Joint Relaxations of Monotonicity and Independence Picchetti, Pedro Econometrics Methodology In this paper I develop a breakdown frontier approach to assess the sensitivity of Local Average Treatment Effects (LATE) estimates to violations of monotonicity and independence of the instrument. I parametrize violations of independence using the concept of $c$-dependence from Masten & Poirier (2018) and allow for the share of defiers to be greater than zero but smaller than the share of compliers. I derive identified sets for the LATE and the Average Treatment Effect (ATE) in which the bounds are functions of these two sensitivity parameters. Using these bounds, I derive the breakdown frontier for the LATE, which is the weakest set of assumptions such that a conclusion regarding the LATE holds. I derive consistent sample analogue estimators for the breakdown frontiers and provide a valid bootstrap procedure for inference. Monte Carlo simulations show the desirable finite-sample properties of the estimators and an empirical application shows that the conclusions regarding the effect of family size on unemployment from Angrist & Evans (1998) are highly sensitive to violations of independence and monotonicity. |
| title | Sensitivity Analysis for Instrumental Variables Under Joint Relaxations of Monotonicity and Independence |
| topic | Econometrics Methodology |
| url | https://arxiv.org/abs/2603.25529 |