If the Instruments Are Not Exogenous

question 7

Multiple Choice

If the instruments are not exogenous,

• A)you cannot perform the first stage of TSLS.
• B)then, in order to conduct proper inference, it is essential that you use heteroskedasticity-robust standard errors.
• C)your model becomes overidentified.
• D)then TSLS is inconsistent.

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Definitions:

Differentiated Marketing

A strategy where a company targets multiple market segments with a unique marketing strategy for each, rather than adopting a mass marketing approach.

Segmenting The Market

The method involves categorizing a wide market of current and prospective customers, both in the consumer and business spheres, into smaller segments that share common attributes.

Psychographic Variables

Characteristics of consumers, such as lifestyle, values, attitudes, and personality, used to understand and segment markets.

Demographic Variables

Characteristics of population segments used in market research and segmentation, such as age, gender, income, education level, and marital status.