What is meant by the statement that x is endogenous

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Reference no: EM13499721

Consider the regression equation

y_i= β₁ + β₂x_2i+ β₃x_3i+e_i

where x_2i, is exogenous and z_i, is endogenous. z_i, is a valid instrument for x₃.
In this context, what is meant by the statement that x₃, is endogenous?

You may select more than one condition. You will receive credit for each correct condition. You will lose marks for selecting an incorrect condition. The lowest mark that you can score for this question is zero.

56_Regression equation.png

Reference no: EM13499721

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