Question: Consider the following simple regression model: y = 0 + 1 x + u . Suppose z is an instrument for x . Which of
Consider the following simple regression model: yxu
Suppose z is an instrument for x
Which of the following conditions denotes instrument relevance?
Group of answer choices
The instrumental variables estimator is always biased if Covxu
The condition Covzu can be tested statistically.
The condition Covzx cannot be tested statistically.
The ordinary least squares estimator is unbiased if Covxu
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