Question: (IV) Consider generalizing Chamberlain (1982) to instrumental variables estimation. Suppose that and that $X_{nt}$ contains elements that are correlated with $epsilon_{nt}$ as well as $alpha_{n}$.

(IV) Consider generalizing Chamberlain (1982) to instrumental variables estimation. Suppose that

and that $X_{nt}$ contains elements that are correlated with $\epsilon_{nt}$ as well as $\alpha_{n}$. Suppose also that there are instrumental variables $w_{nt}$ that are correlated with $X_{nt}$ but not $\epsilon_{nt}$ so that

Give conditions so that $\beta_{0}$ is identified and describe an estimation method.

Yn x+an+

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