Describe the Consequences of Estimating an Equation by OLS in the Presence

question 24

Essay

Describe the consequences of estimating an equation by OLS in the presence of an endogenous regressor. How can you overcome these obstacles? Present an alternative estimator and state its properties.

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Definitions:

Operations Management

The process of planning, organizing, and supervising the production, manufacture, or provision of services, emphasizing efficiency and effectiveness.

Being Flexible

The capacity to adapt to new, different, or changing requirements and conditions in a responsive and practical manner.

Self-management

The ability of an individual to manage their own activities, emotions, and behaviors effectively without external supervision.

Career Success

The achievement of personal and professional goals leading to a sense of fulfillment and accomplishment in one's career.