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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.

3 votes
1 answer
286 views

Instrumental variables and noisy measurement

I am interested in the effect of the unemployment rate at the time of labor market entry ($u^{LME}$) on wages later in life (this is an old question, but I have a new data set). I'd like to run someth …
John's user avatar
  • 93
4 votes
1 answer
3k views

Fixed Effects and Dynamic Panel Data

I have a theoretical model that suggests I should estimate the following regression using longitudinal data: $s_{it} = \eta_{i} + \beta_0 x_{it} + \beta_1 x_{it}^2 + \epsilon_{it}$ where $x_{it} \e …
John's user avatar
  • 93