When estimating the structural parameters of simultaneous equation models,how do least squares estimates,compare to the true value of $\beta$?
D)The direction of the bias depends on the sample correlation.

Question

Quizplus · Accepted Answer

The least squares estimates of the structural parameters of simultaneous equation models are biased and inconsistent. The bias is due to the fact that the regressors are correlated with the error term. The direction of the bias depends on the sample correlation between the regressors and the error term.

When Estimating the Structural Parameters of Simultaneous Equation Models,how Do β\betaβ

When Estimating the Structural Parameters of Simultaneous Equation Models,how Do $\beta$