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In the model log(wage) = o + 1educ + 2exper+u, suppose that exper is exogenous, and (dist_school, fatheduc) are instruments for educ. We may test
In the model log(wage) = o + 1educ + 2exper+u, suppose that exper is exogenous, and (dist_school, fatheduc) are instruments for educ. We may test the null hypothesis that (dist_school, fatheduc) are both exogenous by the statistic nR2, where n is the sample size and R2 is the R-squared from the regression of the 2SLS residual on O a. (dist_school, fatheduc, u). O b. (dist_school, fatheduc, educ). O c. (dist_school, fatheduc, educ, exper). Od. (dist_school, fatheduc, exper). e. (educ, exper)
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