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Extraneous Estimates
If some parameters are identified, while others are not and there exists information on their value from other (extraneous) sources, the researcher may proceed with the estimation of the identified coefficients and use the extraneously known value for the non-identified ones.
Of the above identifjling restrictions the most important and most widely used are the restrictions on the values of the structural parameters.
a) Show that A counting proof could be fun(?). But any old proof will do. (Note that the coefficients (1,2,1) in the above are just the elements of the second row of Pas
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In econometric theory two possibie situations of identifiability can arise: Equation under,consideration is identified or not identified: 1) Equation is under-identified-
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Extraneous Estimates If some parameters are identified, while others are not and there exists information on their value from other (extraneous) sources, the researcher may pro
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