The Reduced Form Equation for X

question 16

Multiple Choice

The reduced form equation for X

• A)regresses the endogenous variable X on the smallest possible subset of regressors.
• B)relates the endogenous variable X to all the available exogenous variables, both those included in the regression of interest and the instruments.
• C)uses the predicted values of X from the first stage as a regressor in the original equation.
• D)uses smaller standard errors, such as homoskedasticity-only standard errors, for inference.

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Definitions:

Family of Orientation

The family into which an individual is born or adopted, encompassing parents and siblings.

Census Family

A unit defined by statistics agencies for the census, usually consisting of a household of related individuals, such as parents and their children.

Conjugal Family

A family unit consisting of a married couple and their children, emphasizing the relationship between the spouses.

Family of Procreation

Refers to the family unit created by an individual, together with their partner and children, distinct from the family of origin in which the individual was born or raised.