A correctly specified exposure map implies design-side orthogonality conditions, so the exposure radius can be estimated by GMM and tested by overidentification — rejecting the 2 km radius in the GiveDirectly experiment.
Estimating Demand with Recentered Instruments
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abstract
We develop a new approach to estimating flexible demand models with exogenous supply-side shocks. Our approach avoids conventional assumptions of exogenous product characteristics, putting no restrictions on product entry, despite using instrumental variables that incorporate characteristic variation. The proposed instruments are model-predicted responses of endogenous variables to the exogenous shocks, recentered to avoid bias from endogenous characteristics. We illustrate the approach in a series of Monte Carlo simulations.
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econ.EM 1years
2026 1verdicts
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A Design-Based Approach to Testing and Inference in (Quasi-)Experiments with Spillovers
A correctly specified exposure map implies design-side orthogonality conditions, so the exposure radius can be estimated by GMM and tested by overidentification — rejecting the 2 km radius in the GiveDirectly experiment.