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ERIC Number: EJ1377689
Record Type: Journal
Publication Date: 2023
Pages: 8
Abstractor: As Provided
ISBN: N/A
ISSN: ISSN-0022-0485
EISSN: EISSN-2152-4068
An Alternative Approach for Introducing Instrumental Variables Based on Ordinary Least Squares Omitted Variable Bias
Keefer, Quinn A. W.
Journal of Economic Education, v54 n1 p94-101 2023
An alternative approach for introducing instrumental variables in econometrics courses is presented in this article. The method is based on the ordinary least squares omitted variable bias formula. The intuition for the approach capitalizes on students' understanding and intuition of omitted variables. Thus, if students understand omitted variable bias, they can understand instrumental variables. Furthermore, using omitted variable bias to derive the instrumental variables estimator clearly highlights the critical assumptions of instrumental variables. The author illustrates the proposed method mathematically and discusses the intuition in both simple and multiple regression cases.
Routledge. Available from: Taylor & Francis, Ltd. 530 Walnut Street Suite 850, Philadelphia, PA 19106. Tel: 800-354-1420; Tel: 215-625-8900; Fax: 215-207-0050; Web site: http://www.tandf.co.uk/journals
Publication Type: Journal Articles; Reports - Descriptive
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A
Grant or Contract Numbers: N/A