Identification

a) What is simultaneity bias? Explain the conditions required for identification of parameters in a simultaneous equation model. b) In the following two-equation system check the identification status of both the equations. 𝑌1 =∝1+∝2 𝑌2 + 𝑢1 𝑌2 = 𝛽1 + 𝛽2𝑌1 + 𝛽3𝑍1 + 𝛽4𝑍2 + 𝑢2

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Introduction Simultaneity bias and identification are two fundamental concepts in econometrics, particularly when dealing with simultaneous equation models (SEMs). SEMs occur when more than one endogenous variable is determined within a system of equations, causing problems in estimation using ordinary least squares (OLS). a) What is Simultaneity Bias? Simultaneity bias occurs when an explanatory variable […]

a) What is simultaneity bias? Explain the conditions required for identification of parameters in a simultaneous equation model. b) In the following two-equation system check the identification status of both the equations. 𝑌1 =∝1+∝2 𝑌2 + 𝑢1 𝑌2 = 𝛽1 + 𝛽2𝑌1 + 𝛽3𝑍1 + 𝛽4𝑍2 + 𝑢2 Read More »

What is meant by identification in a simultaneous equation model? Check the identification status of the equations in the following model: Demand function: 𝑄t = 𝛼0+ 𝛼1𝑃t + 𝛼2𝑋t + 𝑢1t Supply function: 𝑄t = 𝛽0 + 𝛽1𝑃t + 𝑢2t

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Introduction In econometrics, simultaneous equation models are used when two or more endogenous variables are determined together, influencing each other. Unlike single-equation models where one variable is dependent and the others are independent, simultaneous equation models have multiple equations with interdependent variables. One crucial concept in dealing with such models is identification. What is Meant

What is meant by identification in a simultaneous equation model? Check the identification status of the equations in the following model: Demand function: 𝑄t = 𝛼0+ 𝛼1𝑃t + 𝛼2𝑋t + 𝑢1t Supply function: 𝑄t = 𝛽0 + 𝛽1𝑃t + 𝑢2t Read More »

Examine the Relationship Between Identity and Identification

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Examine the Relationship Between Identity and Identification Identity and identification are closely related sociological concepts that help explain how individuals see themselves and relate to others in society. Identity refers to how people define themselves, while identification is the process through which this identity is formed and recognized within a social context. — What is

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