The J-Statistic A $\chi _ { m - k } ^ { 2 }$

question 14

Short Answer

The J-statistic a. tells you if the instruments are exogenous.
b. provides you with a test of the hypothesis that the instruments are exogenous for the case of exact identification.
c. is distributed $\chi _ { m - k } ^ { 2 }$ where $m - k$ is the degree of overidentification.
d. Is distributed $\chi _ { m - k } ^ { 2 }$ where $m - k$ is the number of instruments minus the number of regressors.

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Definitions:

Prepaid Expenses

Costs paid in advance for goods or services to be received in the future.

Total Assets

The sum of all assets owned by a company, both current and non-current, used to calculate the company's financial health.

Vertical Analysis

A method of financial statement analysis in which each entry for each of the three major categories of accounts (assets, liabilities, and equities) in a balance sheet is represented as a proportion of the total account.

Sales Revenues

Income received from selling goods or services over a period of time.