Instrumental Variables, Endogeneity, Regression, Linear Regression, Python.
exogeneity condition for using z_3. If z_3 satisfies the relevance condition and the exogeneity condition, z_3 is known as the Instrumental Variable or the Instrument for x_2. But first, let’s examine a subtle point about z_3. Since z_3 is correlated with x_3, we can express x_3 as a linear