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PUBLICATION DATE: June 11, 2012 PRODUCT #: KEL643-PDF-ENGPractical Regression Discrete Dependent Variables Case Solution
This is actually the ninth in a string lecture notes which, if tied together into a textbook, might be entitled “Practical Regression.” The aim of the notes would be to supplement the theoretical content of the majority of statistics texts with practical advice based on almost three decades of expertise of the writer, joined with over one hundred years of expertise of co-workers that have offered guidance. As the name “Practical Regression” implies, these notes are a guide to performing regression in practice. This note returns to the subject of endogeneity, describing how a predictor variable may be endogenous (and thus its coefficient may be biased) if causality is in uncertainty. Through a long case of the learning curve in medicine, the note introduces the idea of instrumental variables (IV), offers an intuitive explanation for why devices solve the causality issue, and describes the best way to guess two and IV -stage least squares regressions.