Bridging Methodologies: Angrist and Imbens' Contributions to Causal Identification

Abstract

In the 1990s, Joshua Angrist and Guido Imbens studied the causal interpretation of Instrumental Variable estimates (a widespread methodology in economics) through the lens of potential outcomes (a classical framework to formalize causality in statistics). Bridging a gap between those two strands of literature, they stress the importance of treatment effect heterogeneity and show that, under defendable assumptions in various applications, this method recovers an average causal effect for a specific subpopulation of individuals whose treatment is affected by the instrument. They were awarded the Nobel Prize primarily for this Local Average Treatment Effect (LATE). The first part of this article presents that methodological contribution in-depth: the origination in earlier applied articles, the different identification results and extensions, and related debates on the relevance of LATEs for public policy decisions. The second part reviews the main contributions of the authors beyond the LATE. J. Angrist has pursued the search for informative and varied empirical research designs in several fields, particularly in education. G. Imbens has complemented the toolbox for treatment effect estimation in many ways, notably through propensity score reweighting, matching, and, more recently, adapting machine learning procedures.