Consider the following simple regression model y=β0 + β1x1 + u.The variable z is a poor instrument for x if _____.
A) there is a high correlation between z and x
B) there is a low correlation between z and x
C) there is a high correlation between z and u
D) there is a low correlation between z and u
Correct Answer:
Verified
Q1: The order condition for identification of an
Q1: Which of the following assumptions is required
Q6: If the instrumental variable estimator has an
Q10: Consider the following simple regression model y=β0+
Q11: Consider the following simple regression model y=β0+
Q13: Which of the following assumptions is required
Q15: The procedure of comparing different instrumental variables
Q17: The test for overidentifying restrictions is valid
Q21: Instrumental variables cannot be used for estimating
Q23: Two stage least squares estimation cannot be
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents