Go GROUP: anatory variables. 3 (20%): Consider a linear model with one endogenous explanatory variable and r exogenous e

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Go GROUP: anatory variables. 3 (20%): Consider a linear model with one endogenous explanatory variable and r exogenous e

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Go Group Anatory Variables 3 20 Consider A Linear Model With One Endogenous Explanatory Variable And R Exogenous E 1
Go Group Anatory Variables 3 20 Consider A Linear Model With One Endogenous Explanatory Variable And R Exogenous E 1 (17 KiB) Viewed 43 times
Go GROUP: anatory variables. 3 (20%): Consider a linear model with one endogenous explanatory variable and r exogenous ex- Suppose that we have m possible instrumental variables. Explain which conditions have to satisfy to be valid instruments. Explain which it means that the m instruments are weak (25%). Which are the consequences of using weak instruments on the inferences performed? (25%) How would you test that these instruments are weak? (50%) How many potential instruments do you need to be able to test that they are exogenous? (25%) Explain how would you execute the test. (75%) ANSWER:
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