Local Average Treatment Effect (LATE) refers to the average effect of a treatment on a specific subgroup of individuals who are affected by an instrumental variable. It is especially relevant in causal inference when random assignment is not possible, allowing researchers to estimate the impact of interventions on those who actually change their behavior as a result of the instrument. LATE is important because it helps clarify the treatment effect for 'compliers,' or those individuals whose treatment status changes due to the instrumental variable.
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