Use of Instrumental Variables in Observational Studies of Treatment Effects

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In any non-randomized study, selection bias is a potential threat to the validity of conclusions reached. Failure to account for sample selection bias can lead to conclusions about treatment effectiveness or treatment cost that are not really due to the treatment at all, but rather to the unobserved factors that are correlated with both treatment and outcomes. Sample selection models provide a test for the presence of selection bias. These models also provide a correction for selection bias, enabling an investigator to obtain unbiased estimates of treatment effects. This course will discuss the various models and their applications and, in particular, will address instrument variables (two-stage least squares, intuition, and randomized controlled trials (RCTs)), including an overview of e...