Which Object from the First or Second Stage Reports Whether

question 15

Multiple Choice

Which object from the first or second stage reports whether an instrument is relevant?

• A) Check if the residuals from the first stage regression are uncorrelated with the instrumental variable.
• B) Check if the residuals from the second stage regression are uncorrelated with the instrumental variable.
• C) Check if the coefficient on the instrumental variable in the first stage is statistically distinct from zero.
• D) Check if the coefficient on the instrumental variable in the second stage is statistically distinct from zero.

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