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Consider the single equation model Yi = + Xi + ei where Yi and Xi are both real-valued (1 1). Let denote the IV estimator
Consider the single equation model Yi = + Xi + ei where Yi and Xi are both real-valued (1 1). Let denote the IV estimator of using an instrument a dummy variable Zi (takes only the values 0 and 1). Show that the IV estimator can be written as
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