In the case of heterogeneous causal effects, the following is not true: A)in the circumstances in which OLS would normally be consistent (when E(u_i | X_i)= 0), the OLS estimator continues to be consistent. B)OLS estimation using heteroskedasticity-robust standard errors is identical to TSLS. C)the OLS estimator is properly interpreted as a consistent estimator of the average causal effect in the population being studied. D)the TSLS estimator in general is not a consistent estimator of the average causal effect if an individual's decision to receive treatment depends on the effectiveness of the treatment for that individual.

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Quizplus · Accepted Answer

B) is not true because OLS estimation using heteroskedasticity-robust standard errors does not become identical to TSLS (Two-Stage Least Squares). TSLS is used to address endogeneity issues, while heteroskedasticity-robust standard errors in OLS are used to correct for heteroskedasticity in the error terms, not to address endogeneity directly.

In the Case of Heterogeneous Causal Effects, the Following Is