NBER

Kirill Borusyak

Drayton House
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WC1H 0AX
United Kingdom

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliation: University College London

NBER Working Papers and Publications

September 2020Non-Random Exposure to Exogenous Shocks: Theory and Applications
with Peter Hull: w27845
We develop new tools for causal inference in settings where exogenous shocks affect the treatment status of multiple observations jointly, to different extents. In these settings researchers may construct treatments or instruments that combine the shocks with predetermined measures of shock exposure. Examples include measures of spillovers in social and transportation networks, simulated eligibility instruments, and shift-share instruments. We show that leveraging the exogeneity of shocks for identification generally requires a simple but nonstandard recentering, derived from the specification of counterfactual shocks that might as well have been realized. We further show how specification of counterfactual shocks can be used for finite-sample inference and specification tests, and we char...
September 2018Quasi-Experimental Shift-Share Research Designs
with Peter Hull, Xavier Jaravel: w24997
Many studies use shift-share (or “Bartik”) instruments, which average a set of shocks with exposure share weights. We provide a new econometric framework for shift-share instrumental variable (SSIV) regressions in which identification follows from the quasi-random assignment of shocks, while exposure shares are allowed to be endogenous. The framework is motivated by an equivalence result: the orthogonality between a shift-share instrument and an unobserved residual can be represented as the orthogonality between the underlying shocks and a shock-level unobservable. SSIV regression coefficients can similarly be obtained from an equivalent shock-level regression, motivating shock-level conditions for their consistency. We discuss and illustrate several practical insights delivered by this fr...

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