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• W3194604013 abstract "In the single-IV model, researchers commonly rely on t-ratio-based inference, even though the literature has quantified its potentially severe large-sample distortions. Building on Stock and Yogo (2005), we introduce the tF critical value function, leading to a standard error adjustment that is a smooth function of the first-stage F-statistic. For one-quarter of specifications in 61 AER papers, corrected standard errors are at least 49 and 136 percent larger than conventional 2SLS standard errors at the 5 percent and 1 percent significance levels, respectively. tF confidence intervals have shorter expected length than those of Anderson and Rubin (1949), whenever both are bounded. (JEL C13, C26)" @default.
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• W3194604013 date "2022-10-01" @default.
• W3194604013 modified "2023-10-18" @default.
• W3194604013 title "Valid <i>t</i>-ratio Inference for IV" @default.
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• W3194604013 doi "https://doi.org/10.1257/aer.20211063" @default.
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