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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.

2 votes
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How to show that the 2SLS estimand is equal to weighted average of two instruments

How can I show that below is true, using the properties of covariances. We are interested in how a binary treatment variable $D_i$ affects an outcome variable $Y_i$. We have access to \emph{two valid …
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