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Higher education researchers are often challenged by the difficulty of empirically validating causal links posited by theories or inferred from correlational observations. The instrumental variable (IV) estimation strategy is one approach that researchers can use to estimate the causal impact of various higher education–related interventions. In this chapter, we discuss how the body of quantitative research specifically devoted to higher education has made use of the IV estimation strategy: we describe how this estimation strategy was used to address causality concerns and provide examples of the types of IVs that were used in various subfields of higher education research. Our discussion is based on a systematic review of a corpus of econometric studies on higher education–related issues that spans the last 30 years. The chapter concludes with a critical discussion of the use of IVs in quantitative higher education research and a discussion of good practices when using an IV estimation strategy.

This paper aims to investigate the effects of using poor-quality instruments to remedy endogeneity in logit-based demand models. Endogeneity problems in demand models occur when certain factors, unobserved by the researcher, affect both demand and the values of a marketing mix variable set by managers. For example, unobserved factors such as style, prestige or reputation might result in higher prices for a product and higher demand for that product. If not addressed properly, endogeneity can bias the elasticities of the endogenous variable and subsequent optimization of the marketing mix. In practice, instrumental variables (IV) estimation techniques are often used to remedy an endogeneity problem. It is well-known that, for linear regression models, the use of IV techniques with poor-quality instruments can produce very poor parameter estimates, in some circumstances even worse than those that result from ignoring the endogeneity problem altogether. The literature has not addressed the consequences of using poor-quality instruments to remedy endogeneity problems in non-linear models, such as logit-based demand models.

Using simulation methods, the authors investigate the effects of using poor-quality instruments to remedy endogeneity in logit-based demand models applied to finite-sample data sets. The results show that, even when the conditions for lack of parameter identification due to poor-quality instruments do not hold exactly, estimates of price elasticities can still be quite poor. That being the case, the authors investigate the relative performance of several non-linear IV estimation procedures utilizing readily available instruments in finite samples.

The study highlights the attractiveness of the control function approach (Petrin and Train, 2010) and readily available instruments, which together reduce the mean squared elasticity errors substantially for experimental conditions in which the theory-backed instruments are poor in quality. The authors find important effects for sample size, in particular for the number of brands, for which it is shown that endogeneity problems are exacerbated with increases in the number of brands, especially when poor-quality instruments are used. In addition, the number of stores is found to be important for likelihood ratio testing. The results of the simulation are shown to generalize to situations under Nash pricing in oligopolistic markets, to conditions in which cross-sectional preference heterogeneity exists and to nested logit and probit-based demand specifications as well. Based on the results of the simulation, the authors suggest a procedure for managing a potential endogeneity problem in logit-based demand models.

The literature on demand modeling has focused on deriving analytical results on the consequences of using poor-quality instruments to remedy endogeneity problems in linear models. Despite the widespread use of non-linear demand models such as logit, this study is the first to address the consequences of using poor-quality instruments in these models and to make practical recommendations on how to avoid poor outcomes.

The purpose of this paper is to assess the effects of trade and financial globalization on human development in 52 African countries using updated data (1996-2010) and a new indicator of human development (adjusted for inequality).

The estimation technique used is a two stage least squares instrumental variable methodology. Instruments include income-levels, legal-origins and religious-dominations. The first-step consists of justifying the choice of the estimation technique with a Hausman-test for endogeneity. In the second-step, the paper verifies that the instrumental variables are exogenous to the endogenous components of explaining variables (globalization dynamic channels) conditional on other covariates (control variables). In the third-step, the strength and validity of the instruments are assessed with the Cragg-Donald and Sargan overidentifying restrictions tests, respectively. Robustness checks are ensured by: the use of alternative globalization indicators; endogeneity-based estimation; adoption of two interchangeable sets of instruments; estimation with a technique that controls for time-invariant unobservable shocks that affect openness and human development simultaneously.

Findings broadly indicate that while trade globalization improves human development (consistent with the neoliberal theory), financial globalization has the opposite effect (in line with the hegemony thesis). The “life expectancy” component of the Human Development Index weighs most in the positive impact of trade globalization on human emancipation.

Capital accounts should be opened in tandem with financial and institutional development. The investment atmosphere needs improvement to curtail capital flight (about 39 percent). Other policy implications include adoption of openness options in a selective and gradual manner, development of some industrial backbone for an import-substitution or export-led industry, emphasis on regional trade and building capacity, development of the agricultural sector with continuous government assistance, building of rural infrastructure, increasing adult literacy rate and developing human resources, fighting corruption and mitigating wastages in government expenditure.

These findings are based on very recent data. Usage of the inequality-adjusted Human Development Index first published in 2010 corrects past works of the bulk of criticisms inherent in the first index.

As the international society faces unprecedented challenges associated with resource scarcity, governance scandals, increasing injustice and inequality, new opportunities for higher education institutions are emerging. This paper aims to investigate the association between national governance standards and education quality across nine western European countries, namely, the UK, Germany, France, Finland, Norway, Switzerland, Sweden, Denmark and Ireland.

Using panel data from 2002 to 2017, this paper uses fixed-effects and random-effects models to examine the relationship between national governance (proxied by voice and accountability (V&A) indicator) and education quality (proxied by human development index: education index). This analysis is supplemented with conducting instrumental variable (IV) estimations to address any concerns regarding the expected occurrence of endogeneity problems.

The findings are suggestive of a significant and positive relationship between national governance and education quality in Europe. This implies that national governance standards, such as V&A, are essential actors in the enhancement of the quality of educational institutions’ outcomes.

Policymakers should implement stricter regulations and ensure that accountability indicators are motivated if they wish to increase the spending on education, which is associated with better qualities of educational institutions. A culture of continuous review of education policies needs to be upheld in the Western Europe region to be watchful of any emerging problems while maintaining a sustainable relationship between the rule of law and the education administration.

So far, a minimal number of studies focussed on examining the role of country-level governance in advancing education quality. This study, therefore, extends the body of prior literature by investigating the possible effect of national governance structures on education quality across a sample of Western European countries.

The purpose of this paper is to evaluate the effect of veteran status on civilian wages and on retirement age through employing individual-level data.

Instrumental variable (IV) estimation specifications show that, contrary to public perception, veteran status has a statistically significant positive impact on an individual’s civilian wage and thus helps him retire earlier than his non-veteran counterpart.

Moreover, the wage premium effect largely holds for less-educated men; however, for highly educated men, military service has adverse effects on their subsequent wages, and thus, on their retirement age. In line with this result, the effects of veteran status on retirement age largely hold for the relatively less-educated group.

This is the first finding to shed light on the link between veteran status and the decision to retire. This work is also first attempt to explore relationship between compulsory military service and subsequent civilian labor market performance, using the Korean individual-level data via relevant IV estimation methodology.

Poverty and inequality undoubtedly remain substantial challenges to economic and human developments amid growing emphasis on intellectual property rights (IPRs) (with recent advances in information and communication technology (ICTs)) and good governance. In the first empirical study on the incidence of piracy on inequality in Africa, the purpose of this paper is to examine how a plethora of factors (IPRs laws, education and ICTs and government quality) are instrumental in the piracy-inequality nexus.

Two-stage least squares estimation approaches are applied in which piracy is instrumented with IPRs regimes (treaties), education and ICTs and government quality dynamics.

The main finding suggests that, software piracy is good for the poor as it has a positive income-redistributive effect; consistent with economic and cultural considerations from recent literature. ICTs and education (dissemination of knowledge) are instrumental in this positive redistributive effect, while good governance mitigates inequality beyond the piracy channel.

As a policy implication, in the adoption IPRs, sampled countries should take account of the role less stringent IPRs regimes play on income-redistribution through software piracy. Collateral benefits include among others, the cheap dissemination of knowledge through ICTs which African countries badly need in their quest to become “knowledge economies.” A caveat, however, is that, too much piracy may decrease incentives to innovate. Hence, the need to adopt tighter IPRs regimes in tandem with increasing income-equality.

It is the first empirical assessment of the incidence of piracy on inequality in Africa: a continent with stubbornly high poverty and inequality rates.

In light of the inequality in access to farming land and the high prevalence of child malnutrition in Sudan, there is a lack of empirical research on the relationship between land ownership and child nutritional status. This study aims to examine the influence of agricultural landholding on the nutritional status of children under the age of five in rural Sudan.

The study utilizes data from Sudan’s 2014 Multiple Indicator Cluster Survey (MICS), covering a sample of 10,753 rural children. The empirical analysis uses the two-stage least squares (2SLS) approach, adopting various estimation methods and model specifications for robustness check and comparison.

The results demonstrate that agricultural land has a positive and significant effect on reducing child malnutrition, signifying that children from families with agricultural land are less susceptible to malnutrition in Sudan. When examining the male and female sub-samples separately, the findings indicate a positive influence of land ownership on child malnutrition in the female sub-sample, while no significant impact is observed in the male sub-sample. This indicates a gender disparity in the effects of land ownership on child nutrition, with girls benefiting more from access to agricultural land compared to boys.

The study has several significant contributions. First, this is the sole study that examines the impact of agricultural land ownership on child malnutrition in Sudan. Second, considering the gender variations in nutritional status, investigating the influence of land ownership on child nutrition across genders addresses a significant gap in the current literature. Finally, the findings resulting from this study can contribute to achieving the United Nations Sustainable Development Goals (SDGs) to be achieved by 2030, precisely focusing on SDG2 Goal 2: Zero hunger and SDG 10: Goal 10: Reduced inequalities.

The purpose of this paper is to attest whether generalized trust variable is the best proxy for social capital in explaining the latter’s effect on economic growth in a panel setting. Via a specially formulated theoretical framework, the authors also test whether the growth-effect of social capital is direct or indirect, and if it is indirect, can property rights be the link between social capital and growth.

The authors begin with testing the robustness of generalized trust variable in explaining the effect of social capital on growth and property rights. The authors then propose a number of trust-alternative variables that are shown to contain an element of trust based on theoretical arguments drawn from previous studies, to proxy for social capital and re-estimate its effect on growth and property rights. In this study, the authors use panel estimation technique, hitherto has been limited in social capital studies, which are capable of reducing omitted variable bias and time-invariant heterogeneity compared to the commonly used cross-sectional estimation.

First, the authors find that generalized trust data obtained by the World Value Survey (WVS) are unable to yield sufficiently robust results in panel estimation due to missing observations problem. Using the proposed trust-alternative variables, the estimation results improve significantly and the authors are able to show that social capital is a deep determinant of growth and it is affecting growth via property rights channel. The findings also give supporting evidence to the primacy of informal rules and constraints as proposed by North (2005) over the political prominence theory by Acemoglu et al. (2005).

Generalized trust data obtained from the WVS, frequently used in majority of social capital studies to measure social capital, yield highly non-robust results in panel estimation due to missing observations problem. Future studies in social capital intending to use panel estimation therefore need to find trust-alternative variables to proxy for social capital, and this paper has proposed four such variables.

The use of panel estimation technique extends the evidence of social capital significance to economic growth and property rights, since the previous social capital studies rely heavily on cross-sectional estimation technique. Due to the availability of annual observations of the trust-alternative variables, this paper is able to find better results as compared to estimation using generalized trust data.

The purpose of this paper is to investigate if women’s exposure to mass media, i.e. television, radio, and print media, is a determinant of female empowerment in India. Indicators of empowerment include female autonomy in domestic decision-making, freedom of movement, financial knowledge and independence, attitudes regarding acceptability of violence against women, actual and desired fertility and use and decisions about contraception.

Data for the analysis come from two rounds of the National Family and Health Survey, a large-scale nationally representative household survey. First, ordinary least squares estimation is used to obtain the parameter estimates. To overcome endogeneity concerns, instrumental variables estimation is also used.

The results reveal a strong positive effect of exposure to mass media on women’s status in India.

These findings highlight the effectiveness of mass media in influencing women positively.

This paper captures the cumulative effects of three types of media: television, radio and print media. It also takes advantage of the most recent data available together with using instrumental variables estimation to overcome endogeneity concerns.

It is widely accepted that good health and education are important components of human capability. Although China has made encouraging progress in education and health causes, the role of poor health as an intervening factor in education has not been fully recognized. Iron deficiency is the major micronutrient deficiency encountered by children and adolescents. Many medical and social studies have found a negative correlation between iron deficiency and children physical growth and cognitive development. However, few of the existing literatures work to the conclusion of a causal relationship considering the endogenity problem in the estimation of a human capital model. The purpose of this paper is to study the iron status of elementary school children living in the poor countryside of western China and its educational consequence with the application of instrumental variable (IV) estimation.

An analytical framework of academic achievement production is adopted in the paper to empirically identify the relationship between iron deficiency and academic achievement to estimate the impact.

Using a sample of 45,549 school children from Gansu, the paper finds that around 86 per cent of the sample children are iron deficient and 40 per cent of the sample children are suffering from iron deficiency anaemia. The use of IV is innovative in identifying the endogenous health variable, namely iron deficiency.

This paper enriches existing studies on children health and education. IV estimation indicates that iron deficiency has a significant adverse impact on school children academic achievement. The paper suggests health intervention, such as iron intake fortification, as a possible measure for education cause.