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on the parameters in order for the instrument y to not be perfectly correla

on the parameters in order for the instrument y to not be perfectly correla

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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Which of the following is the best IV for 32? 32 = 70+7121 +7222 +7323 +22 32= 70+121 + 7222 +22 3₂ = π0+#1²1 + 77222 3₂= 70+71²1 + 7222 +7323 What is the least restrictive assumption we need to impose on the parameters in order for the instrument y to not be perfectly correlated with z₁? #1 #0 and #2 #0 or π3 #0 T2 #0 and #3 +0 T2 #0 or #3 #0 π1 0 and 2 #0 and #3 #0
Transcribed Image Text:Which of the following is the best IV for 32? 32 = 70+7121 +7222 +7323 +22 32= 70+121 + 7222 +22 3₂ = π0+#1²1 + 77222 3₂= 70+71²1 + 7222 +7323 What is the least restrictive assumption we need to impose on the parameters in order for the instrument y to not be perfectly correlated with z₁? #1 #0 and #2 #0 or π3 #0 T2 #0 and #3 +0 T2 #0 or #3 #0 π1 0 and 2 #0 and #3 #0
6. A single endogenous explanatory variable Consider the following structural model: y1 = 50+ B132+ B2²1 +21 Suppose now that there are two exogenous variables excluded from the model: 22 and 23. The assumptions that 22 and 23 do not appear in the model and are uncorrelated with the error u₁ are known as The linear combination that is most highly correlated with 32 is given by the reduced form equation for 32: y2 = 0+121+#222+T323 + v2 E(v2)=0, Cov(21, v2) = 0, Cov(22, 2) = 0, and Cov(23, 12) = 0. exclusion restrictions exclusion restrictions rank conditions overidentifying restrictions 2SLS
Transcribed Image Text:6. A single endogenous explanatory variable Consider the following structural model: y1 = 50+ B132+ B2²1 +21 Suppose now that there are two exogenous variables excluded from the model: 22 and 23. The assumptions that 22 and 23 do not appear in the model and are uncorrelated with the error u₁ are known as The linear combination that is most highly correlated with 32 is given by the reduced form equation for 32: y2 = 0+121+#222+T323 + v2 E(v2)=0, Cov(21, v2) = 0, Cov(22, 2) = 0, and Cov(23, 12) = 0. exclusion restrictions exclusion restrictions rank conditions overidentifying restrictions 2SLS
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