Dear All,
I have a problem that you may be able to help with?
I have a model of the following form:
y = a + b1x1 + b2x2 + ... +xn + u
Where y = a binary dependent variable (a probit model)
X1 is a binary variable with potential reverse causality (endogenous)
x2 - xn are exogenous variables.
I wondered whether you may use IV for this? and how I would go about this?
Would I run for example:
probit X1 X2...Xn Z
save the predicted values and then put them back into my origional equation?
Any help with this matter would be greatly appreciated.
Kind Regards
Fiona M
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