Wednesday, October 29, 2008

Assignment 2

NEW: Notes from Last Week. A brief mathematical overview of how to derive the IV estimator and show that it is consistent.

Notes

This assignment covers instrumental variable analysis. It is based on the lecture and on Verbeek Chapter 5. You are expected to be able to explain in detail the problem of endogeneity and ommitted variable bias and the rationale behind instrumental variable analysis. You will be asked to interpret OLS and IV regressions, compare and contrast coefficients and examine the validity of the instruments.

Practice Assignment

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