# 3SLS Error: Does Not Meet First Order Conditions

I am trying to run the following 3SLS regression in Stata, but I keep getting the error: "Equation is not identified: Does not meet first order conditions."

reg3
(Y1 Y2       X2 X3 X4 X5 X6 X7 X8 X9 X10 X11 X12 X13 X14) ///
(Y2 Y1 Y3    X2 X3 X4 X5 X6 X7 X8 X9 X10 X11 X12 X13 X14) ///
(Y3 Y1    X1 X2 X3 X4 X5 X6 X7 X8 X9 X10 X11 X12 X13 X14)


Y1 through Y3 are the endogenous variables, and the rest are exogenous.

• I think there's an econometric issue here about whether this system of equations is identified, and this is not just a software error interpretation question (which would be arguably off-topic). Sep 20 '17 at 22:41
• This error is a real error due to lack of identifiability as @DimitriyV.Masterov hypothesized, not a coding or other s/w error. For identifiability, the number of excluded exogenous variables must be $\geq$ the number of endogenous variables included in the RHS in each equation. So, for equation 2, there are two endogenous variables on the RHS but only one excluded exogenous variable. For equation 3, there is one endogenous variable on the RHS but no excluded exogenous variables. Equation 1 is OK. Sep 21 '17 at 21:04

This error is a real error due to lack of identifiability as @DimitriyV.Masterov hypothesized, not a coding or other s/w error. For identifiability, the number of excluded exogenous variables must be $\geq$ the number of endogenous variables included in the RHS in each equation. So, for equation 2, there are two endogenous variables on the RHS but only one excluded exogenous variable. For equation 3, there is one endogenous variable on the RHS but no excluded exogenous variables. Equation 1 is OK.