Writing an IV Formula formally

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Writing an IV Formula formally

Postby lucyty » Sat Apr 07, 2018 3:20 pm

Hello, I am new to Eviews and am currently writing my dissertation. I’m sorry if any of this question doesn’t fit the forum guidelines, just let me know and I will change it next time I post.

My question is about how to write my econometric command as a formal formula in my document.

In my case, I have an IV regression:
iv regression Y X2 V (X1 X1*X2 = Z1)

where Y is my dependent variable, X1 is my key explanatory variable which is endogenous due to reverse causality between it and Y and is a dummy variable, X2 is my treatment effect and is also a dummy variable, Z1 is a categoric instrument for the endogeneity of X1 and V is a vector of control variables.

without endogeneity I have a simple regression: Y=a1+b1X1+b2X2+b3X1X2+DV+e

How do I formally write this IV formula in my dissertation ? My thoughts were that I might write it as 2 formulas. 1. a normal regression 2. A regression showing the endogeneity issue but then I haven’t included Z1 in the regressions…

To save me explaining my data and to make the question relevant to all readers I won’t go into the specifics of my data set but if you want any further info to answer my question, please just ask.

Thank you so much!!

Non-normality and collinearity are NOT problems!
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Re: Writing an IV Formula formally

Postby startz » Sat Apr 07, 2018 5:14 pm

Just write the equation and follow it with a sentence saying which variable is endogenous and that you estimated using IV and saying what your instrument is.

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