The Reduced Form Equation for X

Multiple Choice

The reduced form equation for X

A) regresses the endogenous variable X on the smallest possible subset of regressors.
B) relates the endogenous variable X to all the available exogenous variables, both those included in the regression of interest and the instruments.
C) uses the predicted values of X from the first stage as a regressor in the original equation.
D) uses smaller standard errors, such as homoskedasticity-only standard errors, for inference.