Question: In the model log(wage) = o + B1educ + u, suppose that (motheduc, fatheduc) are valid instruments for educ. We can obtain the 2SLS estimate

In the model log(wage) = o + B1educ + u, suppose that (motheduc, fatheduc) are valid instruments for educ. We can obtain the 2SLS estimate of B1 by regressing log(wage) on educ-hat, where educ-hat is the fitted value from the OLS regression of educ on (motheduc, fatheduc). We can then use the estimated coefficient on educ- hat and its standard error from the OLS regression of log(wage) on educ-hat to construct the 95% confidence interval for 1. O a. I agree with the statement. O b. None of the listed answers is correct. O c. I agree with the statement only if educ is correlated with (motheduc, fatheduc). Od. I agree with the statement only if educ-hat is correlated with (motheduc, fatheduc). O e. I agree with the statement only if educ is proven to be endogenous

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