If a structural model has M simultaneous equations,what is the necessary condition for a unique parameter value to be consistently estimated for each variable in the equation?
A)The number of endogenous variables excluded from the equation must be at least as large as M-1
B)the number of endogenous variables excluded must be at least M/2
C)the number of exogenous variables in the equation must be greater than the number of endogenous variables in the equation
D)the sample size must be large enough to allow M * (M-1)degrees of freedom

Question

Quizplus · Accepted Answer

The necessary condition for a unique parameter value to be consistently estimated for each variable in the equation is that the number of endogenous variables excluded from the equation must be at least as large as M-1. This is known as the identification condition.

If a Structural Model Has M Simultaneous Equations,what Is the Necessary