What should you conclude if you get an F-statistic of 8.3 when testing the strength of an instrument? A)it depends on the degrees of freedom and critical value of F B)do not reject H₀;conclude that the instrument is weak and should not be used in 2SLS. C)reject H₀;conclude the instrument is strong and proceed with 2SLS D)do not reject H₀;conclude the instrument is strong and use it in 2SLS

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Quizplus · Accepted Answer

A high F-statistic indicates that the instrument is strong, but without knowing the degrees of freedom and critical value we cannot definitively conclude whether to reject or not reject the null hypothesis. Therefore, if we get an F-statistic of 8.3, we should not reject H₀ and conclude that the instrument is weak and should not be used in 2SLS.

What Should You Conclude If You Get an F-Statistic of 8.3