PPT-Lecture 20 Preview: Omitted Variables and the Instrumental Variables Estimation Procedure

The Ordinary Least Squares Estimation Procedure Omitted Explanatory Variable Bias and Consistency Revisit Omitted Explanatory Variable Bias Review of Our Previous Explanation of Omitted Explanatory Variable Bias. Const Const a. Express the second model 2-Stage . and 3-Stage Least . Squares Regression of a Linear Systems of Equations. 2009 LPGA Performance Statistics and Prize Winnings. www.lpga.com. S.J. Callan and J.M. Thomas (2007). “Modeling the Determinants of a Professional Golfer’s Tournament Earnings,” Journal of Sports Economics, Vol. 8, No. 4, pp. 394-411. Technical Track Session IV. This . material constitutes supporting material for the "Impact Evaluation in Practice" book. This additional material is made freely but please acknowledge its use as follows: . Center for Health Policy and Healthcare Research. January 22, 2015. Steven D. Pizer, PhD. Associate Professor of Health Economics. Department . of Pharmacy . and Health Systems Sciences . School . of . This . material constitutes supporting material for the "Impact Evaluation in Practice" book. This additional material is made freely but please acknowledge its use as follows: . Gertler. , P. J.; Martinez, S., . Review. Demand and Supply Models. Reduced Form (RF) Estimation Procedure One Way to Cope with Simultaneous Equation Models. Two Stage Least Squares (TSLS): An Instrumental Variable Two Step Approach – A Second Way to Cope with Simultaneous Equation Models. Simultaneous Equation Models – Demand and Supply. Demand and Supply Models. Justifying the Reduced Form (RF) Estimation Procedure. An Example: The Market for Beef. Endogenous versus Exogenous Variables. Center for Health Policy and Healthcare Research. January 22, 2015. Steven D. Pizer, PhD. Associate Professor of Health Economics. Department . of Pharmacy . and Health Systems Sciences . School . of . 2-Stage . and 3-Stage Least . Squares Regression of a Linear Systems of Equations. 2009 LPGA Performance Statistics and Prize Winnings. www.lpga.com. S.J. Callan and J.M. Thomas (2007). “Modeling the Determinants of a Professional Golfer’s Tournament Earnings,” Journal of Sports Economics, Vol. 8, No. 4, pp. 394-411. 2-Stage . and 3-Stage Least . Squares Regression of a Linear Systems of Equations. 2009 LPGA Performance Statistics and Prize Winnings. www.lpga.com. S.J. Callan and J.M. Thomas (2007). “Modeling the Determinants of a Professional Golfer’s Tournament Earnings,” Journal of Sports Economics, Vol. 8, No. 4, pp. 394-411. Chapter 7 – Study this closely. Chapter 16 Sections 3.9.1-3.9.7 and 4.3. Lecture 12 Multivariate Empirical Dist.xls. Lecture 12 Multivariate Normal Dist.xls . Multivariate Probability Distributions. Instrumental variables IVs are used to control for confounding and measurement error in ssibility of making causal inferences with observational data Like propensity scores IVconfounding effects Other Obid. . A.Khakimov. Revew. . Four complications that induce correlation between . X. and . e. Omitted Variables Bias. Measurement Error. Simultaneous Causality. Using Lagged Values of the Dependent Variable as . Learning Objectives. Explain how correlation differs from causation in regression models. Learn the three sources of the . endogeneity. problem and how they cause assumption CR5 to fail. Learn about some solutions to the .