Reader Christopher Ordowich asks:
In sections 5.3-5.4, there is a great discussion of using
fixed effects vs. a lagged dependent variable with panel data. I am
having trouble reconciling some of this discussion with a section in a
recent paper by Imbens and Wooldridge (2008) titled “Recent
Developments in the Econometrics of Program Evaluation.” On page 68 of
their paper (as [...]
Tag Archives: Questions
Adding lagged dependent variables to differenced models
Is 2SLS really OK?
Elias Dinas from EUI asks: In section 4.6.1 you explain very clearly the problems from the straightforward use of the 2SLS logic in binary choice and/orendogenous treatment models. You also provide a simple ‘linearized’ alternative but this is useful at the cost of introducing back-door identifying information. It so happens that I have a continuous [...]
Multiple endogenous variables – now what?!
Diligent reader Daniela Falzon, who works at the World Bank (in France . . . or Washington, DC) writes us with the following interesting problem concerning multiple endogenous variables in 2SLS:
I am estimating Y = b0+ b1*X1 +b2* X2 + b3*X1*X2 + X3
Y is a dummy variable
X1 is a dummy variable and endogenous,
X2 is continuous [...]