Which of the Following Is a Justification for Overidentification Tests

question 3

Multiple Choice

Which of the following is a justification for overidentification tests?

• A) If each instrument satisfies both the inclusion and exclusion condition, than using each instrument alone should produce an unbiased estimate of B1.
• B) If each instrument satisfies both the inclusion and exclusion condition, than using each instrument alone will produce biased results.
• C) Once we identify the excessive identification condition, the efficiency of our estimates will improve.
• D) They allow us to identify weak instruments.

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Definitions:

Westerlies

Prevailing winds that blow from the west to the east in the temperate zones of the Earth.

Portuguese Colony

A territory overseen and controlled by Portugal during its period of colonial expansion, particularly from the 15th to the 20th centuries.

Colonial Economy

Refers to the economic system and practices implemented by colonial powers, often characterized by exploitation and exportation of raw materials from the colonized territories to benefit the colonial country.