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Introduction to instrumental variables .[embedded content] Great presentation, but maybe Angrist should also have pointed out the mistake many economists do when they use instrumental variables analysis and think that their basic identification assumption is empirically testable. It is not. And just swapping an assumption of residuals being uncorrelated with the independent variables with the assumption that the same residuals are uncorrelated with an instrument doesn’t solve the endogeneity problem or improve our causal analysis.
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Lars Pålsson Syll considers the following as important: Statistics & Econometrics
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Introduction to instrumental variables .[embedded content] Great presentation, but maybe Angrist should also have pointed out the mistake many economists do when they use instrumental variables analysis and think that their basic identification assumption is empirically testable. It is not. And just swapping an assumption of residuals being uncorrelated with the independent variables with the assumption that the same residuals are uncorrelated with an instrument doesn’t solve the endogeneity problem or improve our causal analysis.
Topics:
Lars Pålsson Syll considers the following as important: Statistics & Econometrics
This could be interesting, too:
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Introduction to instrumental variables
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Great presentation, but maybe Angrist should also have pointed out the mistake many economists do when they use instrumental variables analysis and think that their basic identification assumption is empirically testable. It is not. And just swapping an assumption of residuals being uncorrelated with the independent variables with the assumption that the same residuals are uncorrelated with an instrument doesn’t solve the endogeneity problem or improve our causal analysis.