No announcement yet.
  • Filter
  • Time
  • Show
Clear All
new posts

  • Testing instrument validity - ordered probit


    I am looking at the relationship between financial inclusion and poverty. my dependent variable is income quintile (inc_q) which is an ordinal variable and i have some control variables along with the binary financial inclusion variable. I used extended ordered Probit regression to address the problem of endogeneity in the financial inclusion (fin_inc) variable. I ran the following code

    eoprobit inc_q female age educ emp_in time , endogenous(fin_inc = fin14, probit)

    where fin14 is my instrument and it gives data on if an individual has made mobile phone transaction or not. I want to test if this a good instrument. how do I test for for instrument exogeneity?

    Any advice on this is appreciated

    D. H