The procedure of comparing different instrumental variables estimates of the same parameter is an example of testing _____.
A)overidentifying restrictions
B)endogeneity
C)heteroskedasticity
D)serial correlation

Question

Quizplus · Accepted Answer

The procedure of comparing different instrumental variables estimates of the same parameter is done to test overidentifying restrictions. Overidentifying restrictions occur when there are more instruments than necessary to identify a parameter, and comparing the estimates from different instruments helps to identify if there are any inconsistencies or limitations in the instruments used.

The Procedure of Comparing Different Instrumental Variables Estimates of the Same