If L is the number of exogenous instruments and B is the number of endogenous regressors in the model,when L = B the model is
A)just identified
B)over identified
C)under identified
D)precisely identified

Question

Quizplus · Accepted Answer

When L = B, the model is just identified, meaning there are exactly enough instruments to identify all endogenous variables in the model. If L > B, the model is over-identified, which means there are more instruments than necessary to identify the endogenous variables. If L < B, the model is under-identified, which means there are not enough instruments to identify all endogenous variables in the model. If L = kB, where k > 1, the model is precisely identified, which means there are k times as many instruments as there are endogenous variables.

If L Is the Number of Exogenous Instruments and B