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Does sport affect health and wellbeing or is it the other way around? A note on reversecausality in empirical applications

Jing Guan and Juan de Dios Tena ()

No 202017, Working Papers from University of Liverpool, Department of Economics

Abstract: Simultaneity of endogenous variables is an issue in econometrics analysis as it affects the identification of structural parameters. Dealing with it implies the use of untestable assumptions such as, for example, choosing relevant instrumental variables, relying on the strong ignorability condition or imposing restrictions in the direction of causality among the endogenous variables. In order to overcome this problem, many recent empirical papers in the sport literature have proposed the use of seemingly aseptic approaches based on the estimation of simultaneous equations for the endogenous variables with correlated error terms. In this note, we discuss the required conditions to consider this approach as a valid alternative to instrumental variables in order to deal with the simultaneity problem.

Keywords: Simultaneity; SUR; structural models (search for similar items in EconPapers)
Pages: 8 pages
Date: 2020-05
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Journal Article: Does Sport Affect Health and Well-Being or Is It the Other Way Around? A Note on Reverse-Causality in Empirical Applications (2021) Downloads
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