Econometrics HT 18
Chapter 25 : Endogeneity
By Lund University
Cases when the OLS estimator is longer appropriate.
Endogeneity
Throughout the course so far, we have assumed that the explanatory variables are exogenous. This is the most critical assumption in econometrics. In this chapter we will look at cases when explanatory variables cannot be expected to be exogenous (we then say that they are endogenous). We will also look at the consequence of econometric analysis with endogenous variables.