12.5 Consider the instrumental variable regression model Yi = b0 + b1Xi + b2Wi + ui, where...
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12.5 Consider the instrumental variable regression model Yi = b0 + b1Xi + b2Wi + ui, where Xi is correlated with ui and Zi is an instrument. Suppose that the first three assumptions in Key Concept 12.4 are satisfied. Which IV assumption is not satisfied when:
a. Zi is independent of (Yi, Xi, Wi)?
b. Zi = Wi?
c. Wi = 1 for all i?
d. Zi = Xi?
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Related Book For 
Introduction To Econometrics
ISBN: 9781292071367
3rd Global Edition
Authors: James Stock, Mark Watson
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