Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Consider the following simple regression model y = 0 + 1 x + u , with z being an instrument for x . Suppose Corr(
Consider the following simple regression model y = 0 + 1x + u, with z being an instrument for x. Suppose Corr(x,u) > 0, Corr(z,x) > 0, and Corr(z,u) < 0. Then, the IV estimator has a(n) _______.
a. | asymptotic bias | |
b. | downward bias | |
c. | no bias | |
d. | upward bias |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started