Supposedly Strong Instruments and Good Leverage Points
Darwin Ugarte Ontiveros () and
No 1203, Working Papers from University of Namur, Department of Economics
In this paper, we warn on the overoptimistic conclusions led by weak instruments testing when good leverage points are present in the first stage of an IV estimation. Some simulations and an empirical application are provided to illustrate the point raised.
Keywords: Instrumental variables; Weak instruments; Outliers; Robust statistics (search for similar items in EconPapers)
JEL-codes: C3 C12 O1 (search for similar items in EconPapers)
Pages: 11 pages
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http://www.fundp.ac.be/eco/economie/recherche/wpseries/wp/1203.pdf First version, 2012 (application/pdf)
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Persistent link: https://EconPapers.repec.org/RePEc:nam:wpaper:1203
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