New method accurately estimates education returns using college proximity instruments.
The article introduces new methods for analyzing data in situations where there are many weak instruments and varying levels of data variability. The researchers developed tests to check the accuracy of the entire set of parameters and also for specific subsets of parameters. These tests are reliable even when the data is not consistent. Through simulations, they found that their methods perform well in terms of accuracy and power. In a real-world example using college proximity data, they were able to estimate the impact of education on earnings.