Valid t-ratio Inference for IV

In the single-IV model, researchers commonly rely on t-ratio-based inference, even though the literature has quantified its potentially severe large-sample distortions.Building on Stock and Yogo (2005), we introduce the tF critical value function, leading to a standard error adjustment that is a smooth function of the first-stage F-statistic.For one-quarter of specifications in 61 AER papers, corrected standard errors are at least 49 and 136 percent larger than conventional 2SLS standard errors at the 5-percent and 1-percent significance levels, respectively.tF confidence intervals have shorter expected length than those of Anderson and Rubin (1949), whenever both are bounded.