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The Two Conditions for Instrument Validity Are Corr(Zi,Xi)≠ 0 and Corr(Zi,ui)=

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The two conditions for instrument validity are corr(Zi,Xi)≠ 0 and corr(Zi,ui)= 0.The reason for the inconsistency of OLS is that corr(Xi,ui)≠ 0.But if X and Z are correlated,and X and u are also correlated,then how can Z and u not be correlated? Explain.


Definitions:

Pain Sensations

The feelings or perceptions produced by stimulation of nerve endings, often signaling harm or potential injury.

Neural Gate

A theoretical mechanism within the nervous system thought to control the passage of pain signals to the brain.

Signal Inhibition

A process by which neural activity is reduced or stopped, leading to the decrease or cessation of a physiological response or signal transmission.

Pheromones

Chemical substances produced and released into the environment by animals, influencing the behavior or physiology of others of its species.

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