ltz: Local-to-Zero Test

Description

Estimates Local-to-Zero IV coefficients and SEs for a single instrument.

Usage

ltz(data, Y, D, Z, controls, FE = NULL, cl = NULL, weights = NULL, prior, prec = 4)

Value

iv: results from a 2SLS regression.
ltz: results after local-to-zerio adjustment.
prior: prior mean and standard deviation

Arguments

data: name of a dataframe.
Y: a string indicating the outcome variable.
D: a string indicating the treatment variable.
Z: a vector of strings indicating the instrumental variables.
controls: a vector of strings indicating the control variables.
FE: a vector of strings indicating the fixed effects variables.
cl: a string indicating the clustering variable.
weights: a string indicating the variable that stores weights.
prior: prior mean and standard deviation of the direct effect of instrument on outcome.
prec: precision of results (4 by default).

References

Conley, Timothy G, Christian B Hansen, and Peter E Rossi. 2012. "Plausibly Exogenous." Review of Economics and Statistics 94 (1): 260–72.

Examples

Run this code

data(ivDiag)
controls <- c('altitudine', 'escursione', 'costal', 'nearsea', 'population', 
    'pop2', 'gini_land', 'gini_income')
ltz_out <- ltz(data = gsz, Y = "totassoc_p", D = "libero_comune_allnord", 
    Z = "bishopcity", controls = controls, weights = "population", 
    prior = c(0.178, 0.137))
plot_ltz(ltz_out)    
    
library(testthat)    
test_that("Check local-to-zero adjustment", {
  expect_equal(as.numeric(ltz_out$ltz[1]), 3.6088)
})