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A Slippery Slope: Topographic Variation as an Instrument

Authors: Haveresch, Nils; Ankel-Peters, Jörg; Bensch, Gunther;

A Slippery Slope: Topographic Variation as an Instrument

Abstract

Exploiting exogenous natural variation to study the impact of hard-to-randomize policies based on instrumental variables (IVs) is a widespread research design in economics. The key identification assumption underlying this design is the exclusion restriction, requiring the IV to affect the outcome variable only through the instrumented treatment variable. We review the literature using topography as an IV to show that systematic violations of this assumption are likely because of topography's ubiquity in socio-economic relationships. Furthermore, as topography often lacks first-stage strength, even subtle violations of the exclusion restriction undermine any causal inference. Instead of the vindication that often accompanies IV applications, we advocate a falsificationist approach to the use of topographic IVs, grounded in precaution and skepticism. We apply this approach to a seminal example of a topographic IV, Dinkelman (2011).

Keywords

collider bias, C52, topography, exclusion restriction, ddc:330, C36, O18, C26, O13, Causal inference

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
0
Average
Average
Average
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