Introductory Econometrics 4th Edition by Jeffrey Wooldridge

تمرين 18

Suppose that annual earnings and alcohol consumption are determined by the SEM
log(earnings) = 0 + 1alcohol + 2educ + u1
alcohol = 0 + 1 log(earnings) + 2educ + 3 log(price) + u2,
where price is a local price index for alcohol, which includes state and local taxes. Assume that educ and price are exogenous. If 2, 2, 1, 2, and 3 are all different from zero, which equation is identified How would you estimate that equation