Consistently bounding parameter values with one instrument and two endogenous explanatory variables

Richard Dunn

Economics Bulletin, 2012, vol. 32, issue 2, 1074-1081

Abstract: The current paper considers a linear regression framework with two endogenous regressors, but only one instrument that is correlated with both. I demonstrate that under reasonable conditions, some of which are testable from the data, these different sources of endogeneity act in opposing directions and hence IV regression can generate economically meaningful bounds.

Keywords: endogeneity; instrumental variables; bounding; under-identification (search for similar items in EconPapers)
JEL-codes: C1 C2 (search for similar items in EconPapers)
Date: 2012-04-01
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Citations: View citations in EconPapers (1)

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