Using Some of the Examples from Your Textbook, Describe Econometric

question 40

Essay

Using some of the examples from your textbook, describe econometric studies which required instrumental variable techniques. In each case emphasize why the need for instrumental variables arises and how authors have approached the problem. Make sure to include a discussion of overidentification, the validity of instruments, and testing procedures in your essay.

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Definitions:

Inferior

Referring to something of lower quality or rank.

Erik Erikson

A developmental psychologist famous for his theory on the psychosocial development of human beings.

Resilience

The capacity to adapt well to significant adversity and to overcome serious stress.

Dynamic

Characterized by constant change, activity, or progress, often used to describe processes or systems that are not static.