Dear Statalisters,
If the theoretically correct functional form of my endogenous variable
calls for its squared term also I in fact have two endogenous
variables, e.g.
y= + a1x1 + a2x1^2 + other exogenous vairables + e
My question is: If I want to report the first stage estimations of
this model. Should all instruments be used
in the regression predicting x1 and again in x2? That is, should there
be two first stages, with different dependent variable (x1 and x1^2) but
the same regressors?
Tinna
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