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Instrumental Variables in Criminology and Criminal Justice

  • Shawn D. Bushway
  • Robert J. Apel
Chapter

Abstract

Instrumental variables estimation is an econometric technique that is commonly employed by economists to overcome the problem of endogeneity in a causal variable of interest. It is a method that could be of some use to criminologists who also frequently confront simultaneity, measurement error, and selection bias. The method is sometimes referred to as a natural experiment because, like a classical experiment, it resolves these problems by rendering variation in the key independent variable exogenous or uncorrelated with the error term. It does so through the introduction of a variable that is correlated with the causal variable of interest but is otherwise uncorrelated with the outcome other than the one through the causal variable. This exclusion restriction is the key to causal identification and must be defended on substantive and theoretical grounds, not necessarily statistical ones. Following an intuitive description of the method, a short empirical example is provided, along with guidance about common pitfalls and potential problems with the method. Researchers interested in a more technical treatment of the method are pointed to accessible treatments in economics.

Keywords

Housing Price Instrumental Variable Child Labor Program Participation Average Treatment Effect 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer Science+Business Media, LLC 2010

Authors and Affiliations

  • Shawn D. Bushway
    • 1
  • Robert J. Apel
    • 1
  1. 1.School of Criminal Justice, University of Albany, State University of New YorkAlbanyUSA

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