Quantitative Economics and Econometrics Tutor – London
Endogeneity breaks OLS. When a regressor correlates with the error term, coefficient estimates are biased and inconsistent. Instrumental variables (IV) and two-stage least squares (2SLS) fix that — provided you have a valid instrument. If you are studying econometrics in London, this is the method your course uses to recover causal estimates from observational data. […]