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Results tagged with instrumental-variables
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user 174283
Instrumental variables (IV) are used for causal inference with observational data in the presence of endogeneity when standard regression methods yield biased and inconsistent estimates.
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Reasons for high standard error (no collinearity)
First of all, a VIF of 2.82 is not that small--your standard error is around 67% larger than it would be without collinearity.
Second, the variance of the predictor is inversely related to the stand …
