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Difference between simultaneous equations, 3SLS, IV...

Posted: Mon Dec 19, 2011 10:37 am
by PLM
Hi,

I'll use IV regression for some endogeneity robustness checks, but I'd like to mention other ways to mitigate the problem.

I've seen 3SLS and simultaneous equations mentioned a few times, but is there any difference between that and IV?

Re: Difference between simultaneous equations, 3SLS, IV...

Posted: Mon Dec 19, 2011 10:59 am
by startz
3sls is essentially IV applied to a system of simultaneous equations while also taking account of correlation between the equations.

Re: Difference between simultaneous equations, 3SLS, IV...

Posted: Mon Dec 19, 2011 12:01 pm
by PLM
Thanks. I found an EXCELLENT paper on endogeneity in a corporate finance context that gave me my answer and much more. I recommend it:

http://papers.ssrn.com/sol3/papers.cfm? ... id=1748604