instrumental variables

Original article by Charles E. Bates , revised by Moshe Buchinsky and Steven N. Durlauf
From The New Palgrave Dictionary of Economics, Second Edition, 2008
Edited by Steven N. Durlauf and Lawrence E. Blume
Alternate versions available: 1987 Edition
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Abstract

Instrumental variables methods are an essential tool in modern econometric practice. The method itself is of ancient lineage and historically is closely connected with the econometrics of simultaneous equations. This article describes the statistical foundations of instrumental variables methods with a focus on their classical development.
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How to cite this article

Bates, Charles E., Moshe Buchinsky and Steven N. Durlauf. "instrumental variables." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 23 December 2014 <http://www.dictionaryofeconomics.com/article?id=pde2008_I000127> doi:10.1057/9780230226203.0812

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