Testing the validity of instruments in an exactly identified equation

Marco Ventura

International Journal of Computational Economics and Econometrics, 2018, vol. 8, issue 2, 159-169

Abstract: Whenever the number of instruments equals the number of endogenous variables testing the validity of the instruments is not a feasible task. Based on recent econometric developments (Lewbel, 2012), this paper aims at spreading among applied economists and econometricians an empirical strategy to overcome this setback, thus sidestepping the exact identification problem.

Keywords: instrumental variables; exact identification; over identifying test; Hansen-Sargan test; endogeneity. (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijcome:v:8:y:2018:i:2:p:159-169

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