Multiple Choice
Which of the following best characterizes the conditions for a good instrument?
A) Z is statistically significant in the first-stage and exerts a direct effect on Y.
B) Z is statistically significant in the first-stage and exerts no direct effect on Y.
C) Z is uncorrelated with both X and Y.
D) Z needs to be included in both stages in order for 2SLS to be appropriate.
Correct Answer:
Verified
Correct Answer:
Verified
Q10: Please explain what an overidentification test is.
Q11: We cannot test if an instrument satisfies
Q12: Please compare the benefits of using 2SLS
Q13: Which one of the following are factors
Q14: If we use a quasi instrument
Q16: Please explain how non-compliance could lead to
Q17: Given the model<br>Crime<sub>it</sub>=B<sub>0</sub>+B<sub>1</sub>Police<sub>i,t</sub>+e<sub>it</sub><br>Which one of the following
Q18: To conduct an overidentification test we run
Q19: Give the probability limit equations for OLS
Q20: In order to statistically verify that an