Open AccessControl functions in nonseparable simultaneous equations models
Author(s) -
Blundell Richard,
Matzkin Rosa L.
Publication year - 2014
Publication title -
quantitative economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 4.062
H-Index - 27
eISSN - 1759-7331
pISSN - 1759-7323
DOI - 10.3982/qe281
Subject(s) - simultaneous equations , nonparametric statistics , nonlinear system , control function , property (philosophy) , mathematics , independent equation , function (biology) , system of linear equations , simultaneous equations model , control (management) , control theory (sociology) , computer science , mathematical analysis , econometrics , differential equation , physics , artificial intelligence , philosophy , epistemology , quantum mechanics , evolutionary biology , biology
The control function approach (Heckman and Robb (1985)) in a system of linear simultaneous equations provides a convenient procedure to estimate one of the functions in the system using reduced form residuals from the other functions as additional regressors. The conditions on the structural system under which this procedure can be used in nonlinear and nonparametric simultaneous equations has thus far been unknown. In this paper, we define a new property of functions called control function separability and show it provides a complete characterization of the structural systems of simultaneous equations in which the control function procedure is valid.