Hello,
This is my first post here, please pardon any mistakes. I am currently researching the effects of climate on crop yield and I am facing endogeneity issues. I read somewhere that using the lag of the endogenous variable works well as an instrument. I am getting significant results for Underidentification and weakidentification tests, from xtoverid, noi command. However, Iam still unsure whether the lagged values work as an endogenous variable. I did the hausman test but Iam unsure of the results as Iam getting contradictory results, but the Davidson-Mackinnon test for exogeneity gave significant results indicating endogeneity. Is there a way to check if the instrument is valid? And which variable is endogenous.
Thank you
This is my first post here, please pardon any mistakes. I am currently researching the effects of climate on crop yield and I am facing endogeneity issues. I read somewhere that using the lag of the endogenous variable works well as an instrument. I am getting significant results for Underidentification and weakidentification tests, from xtoverid, noi command. However, Iam still unsure whether the lagged values work as an endogenous variable. I did the hausman test but Iam unsure of the results as Iam getting contradictory results, but the Davidson-Mackinnon test for exogeneity gave significant results indicating endogeneity. Is there a way to check if the instrument is valid? And which variable is endogenous.
Thank you
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