Instrumental variables (IV) methods provide an approach to estimating causal or structural relationships from observational data and have historically been widely used in economics. This lecture will provide an overview of the statistical underpinnings of the IV model and related methods. Particular attention will be paid to providing understanding of the assumptions that allow one to use instrumental variables to estimate causal quantities and the interpretation of the quantities estimated by IV methods. Several examples will be discussed.
Dr. Hansen is Professor of Econometrics and Statistics at the University of Chicago Booth School of Business. Dr. Hansen studies applied and theoretical econometrics, the uses of high-dimensional statistical methods in economic applications, estimation of panel data models, quantile regression, and weak instruments. Hansen received a PhD in 2004 in economics from the Massachusetts Institute of Technology, where he was a graduate research fellow of the National Science Foundation. He joined the Chicago Booth faculty in 2004. In 2008, Hansen was named a Neubauer Family Faculty Fellow.