In the case of heterogeneous causal effects,the following is not true:
A)in the circumstances in which OLS would normally be consistent (when E(ui Xi)= 0),the OLS estimator continues to be consistent.
B)OLS estimation using heteroskedasticity-robust standard errors is identical to TSLS.
C)the OLS estimator is properly interpreted as a consistent estimator of the average causal effect in the population being studied.
D)the TSLS estimator in general is not a consistent estimator of the average causal effect if an individual's decision to receive treatment depends on the effectiveness of the treatment for that individual.

Question

In the case of heterogeneous causal effects,the following is not true:
A)in the circumstances in which OLS would normally be consistent (when E(ui Xi)= 0),the OLS estimator continues to be consistent. 
B)OLS estimation using heteroskedasticity-robust standard errors is identical to TSLS. 
C)the OLS estimator is properly interpreted as a consistent estimator of the average causal effect in the population being studied. 
D)the TSLS estimator in general is not a consistent estimator of the average causal effect if an individual's decision to receive treatment depends on the effectiveness of the treatment for that individual.

Quizplus · Accepted Answer

OLS estimation using heteroskedasticity-robust standard errors is not identical to TSLS in the case of heterogeneous causal effects. TSLS is designed to address endogeneity bias, while heterogeneity of causal effects is a different issue. Therefore, even with robust standard errors, OLS is not an appropriate estimator for the average causal effect when there is heterogeneity.

In the Case of Heterogeneous Causal Effects,the Following Is Not