Question about IV regression and instruments

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PLM
Posts: 5
Joined: Mon Dec 12, 2011 8:53 am

Question about IV regression and instruments

Postby PLM » Tue Dec 20, 2011 3:16 am

Hi,

I have 2 endogenous variables and 2 instruments. Can I use both instruments for both endogenous variables? If the 2 IV conditions are fulfilled, I assume I can because the endogenous variables are not under identified. What is worrying me a bit is that I can't say "instrument 1 is for endogenous variable 1, and instrument 2 is for endogenous variable 2" (i.e. they are both determinant of both endogenous variables).

startz
Non-normality and collinearity are NOT problems!
Posts: 3798
Joined: Wed Sep 17, 2008 2:25 pm

Re: Question about IV regression and instruments

Postby startz » Tue Dec 20, 2011 8:22 am

Go ahead, this is quite standard.


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