This question is about finding valid instrumental variables.
- the response variable for the structural equation, $y$
- the jointly endogenous RHS variable in the structural equation, $m$
- two control variables ($x_1$ and $x_2$) that will always appear on the RHS of the structural equation
- four potential instrumental variables, denoted by ($z_1$, $z_2$, $z_3$, $z_4$)
The problem of course, is that you have no idea if the potentional IVs are admissible. Your mission in life is to identifity those Instrumental Variables for which the exclusion restrictions are valid, and to estimate the casual effect of $m$ on $y$ in a linear regression on the form:
I dont have any background in these area; is that question trivial or not ?