--- On Fri, 20/11/09, Shruti Kapoor wrote:
> I am using ivreg for the first time and am not sure if i
> can do anything to improve my results. The biggest problem
> i am facing is that the stnd errors on my endogenous variable
> (morethan2children, even when instrumented) is quite high.
> Which makes them insignificant.
In general, large standard errors are not a problem, they are
a finding. We may or may not like that finding, but that is
irrelevant.
Specifically with instrumental variables, I am not surprised
that you find large standard errors. Instrumental variables can
potentially provide you with a very strong argument that the
effect you found is likely to be causal, but there is always a
price to be paid: in the case of instrumental variable the
price is low power (i.e. large standard errors). As the
economists say: there is no such thing as a free lunch.
-- Maarten
--------------------------
Maarten L. Buis
Institut fuer Soziologie
Universitaet Tuebingen
Wilhelmstrasse 36
72074 Tuebingen
Germany
http://www.maartenbuis.nl
--------------------------
*
* For searches and help try:
* http://www.stata.com/help.cgi?search
* http://www.stata.com/support/statalist/faq
* http://www.ats.ucla.edu/stat/stata/
