Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A suitable instrumental variable is one that is correlated with the independent variable and affects the dependent variable only through changes in the independent variable.

image text in transcribed
A suitable instrumental variable is one that is correlated with the independent variable and affects the dependent variable only through changes in the independent variable. Suppose that you are interested in studying the effects of weekly alcohol consumption (alch) on health (health). You consider the following regression model: health = [30 + [31 alch + it Which of the following would make the best instrumental variable for alch? ' Diet ' Exercise habits ' Illegal drug use Sales tax on alcohol in the individual's state

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Algebra And Trigonometry

Authors: Ron Larson

9th Edition

1285605705, 9781285605708

More Books

Students also viewed these Mathematics questions

Question

What is a verb?

Answered: 1 week ago

Question

Purpose: What do we seek to achieve with our behaviour?

Answered: 1 week ago

Question

An action plan is prepared.

Answered: 1 week ago