Controlling for ability using test scores. (31st January 2019)

• Record Type: Journal Article
• Authors: Williams, Benjamin
• Is Part Of: Journal of applied econometrics. Volume 34:Number 4(2019)
• Page Start: 547
• Page End: 565
• Publication Date: 2019-01-31
• Subjects: Econometrics -- Periodicals; 330.015195
• DOI: 10.1002/jae.2683
• Languages: English
• ISSNs: 0883-7252

Abstract

Summary: This paper proposes a semiparametric method to control for ability using standardized test scores, or other item response assessments, in a regression model. The proposed method is based on a model in which the parameter of interest is invariant to monotonic transformations of ability. I show that the estimator is consistent as both the number of observations and the number of items on the test grow to infinity. I also derive conditions under which this estimator is root‐ n consistent and asymptotically normal. The proposed method is easy to implement, does not impose a parametric item response model, and does not require item‐level data. I demonstrate the finite‐sample performance in a Monte Carlo study and implement the procedure for a wage regression using data from the NLSY1979.