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What is Applied Econometrics 2014 7 about?

The document discusses Instrumental Variables (IV) Regression, focusing on its purpose in addressing internal validity threats such as omitted variable bias and simultaneous causality bias. It explains the Two Stage Least Squares (TSLS) method for estimating parameters using valid instruments and outlines the conditions for instrument validity. Several applications and examples, including the demand for cigarettes and the effect of studying on grades, are provided to illustrate the concepts of IV regression

Author

Shek Hung Tsui

Language

EN