In this problem you will test for the weakness of the IV. We will start with installation of some packages. The primary commands that we will be using is weakiv. The rest are their dependecies. Run this: foreach j in weakiv avar moremata { ssc install ‘j’ , replace } Load the data by running use http://www.stata.com/data/jwooldridge/eacsap/mroz.dta, clear (a) Use a 2sls estimator to run an IV regression (using the ivregress command) of log wages with the endogenous variable of education and exogenous covariates of actual labor market experience and the square of experience. Use mother’s education as the instrument. Interpret your estimates. (b) Perform the post-estimation test of weak instrumental variables using weakiv. What do you interpret from the Wald statistic in this test?
In this problem you will test for the weakness of the IV. We will start with installation of some packages. The primary commands that we will be using is weakiv. The rest are their dependecies. Run this: foreach j in weakiv avar moremata { ssc install ‘j’ , replace } Load the data by running use http://www.stata.com/data/jwooldridge/eacsap/mroz.dta, clear (a) Use a 2sls estimator to run an IV regression (using the ivregress command) of log wages with the endogenous variable of education and exogenous covariates of actual labor market experience and the square of experience. Use mother’s education as the instrument. Interpret your estimates. (b) Perform the post-estimation test of weak instrumental variables using weakiv. What do you interpret from the Wald statistic in this test?
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