The rule-of-thumb for checking for weak instruments is as follows: for the case of a single endogenous regressor, A)a first stage F must be statistically significant to indicate a strong instrument. B)a first stage F 1.96 indicates that the instruments are weak. C)the t-statistic on each of the instruments must exceed at least 1.64. D)a first stage F

Question

The rule-of-thumb for checking for weak instruments is as follows: for the case of a single endogenous regressor,
A)a first stage F must be statistically significant to indicate a strong instrument.
B)a first stage F > 1.96 indicates that the instruments are weak.
C)the t-statistic on each of the instruments must exceed at least 1.64.
D)a first stage F < 10 indicates that the instruments are weak.

Quizplus · Accepted Answer

The rule-of-thumb for checking for weak instruments in the case of a single endogenous regressor is that a first stage F-statistic of less than 10 indicates that the instruments are weak. This guideline helps to ensure that the instruments have enough explanatory power to be considered strong.

The Rule-Of-Thumb for Checking for Weak Instruments Is as Follows