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RE: st: OLS and IV have opposite sign
From
Sun Yutao <[email protected]>
To
<[email protected]>
Subject
RE: st: OLS and IV have opposite sign
Date
Mon, 15 Oct 2012 22:40:54 +0200
You mean you get the same value but different signs?
-----Original Message-----
From: [email protected] [mailto:[email protected]] On Behalf Of Shikha Sinha
Sent: Monday, October 15, 2012 10:33 PM
To: [email protected]
Subject: Re: st: OLS and IV have opposite sign
I am estimating the effect of family size (no of children) on probability of work by mother. The endogenous variable is no of children and I instrument this by gender of first born. If the first child is female then family size should be greater.
I understand that IV correct the bias and OLS coeff may be upward or downward biased. One can sign the bias (+) or (-) by examining the correlation between the omited variable and endogenous, but What I do not understand why the sign would change and what determines the opposite sign. I get a negative OLS while a positive IV coeff.
Thanks,
Shikha
On Mon, Oct 15, 2012 at 1:11 PM, Austin Nichols <[email protected]> wrote:
> Shikha Sinha <[email protected]>:
> The econometric reason is simple if you believe the exclusion
> restriction. Tell us what the endog var is, what the excluded
> instruments are, and someone on the list will provide a (verbal)
> description of the bias producing a negative OLS coef estimate
> (evidently no longer visible in the consistent IV estimate). Then
> someone else will weigh in on whether the exclusion restriction makes
> sense, probably...
>
> On Mon, Oct 15, 2012 at 3:58 PM, Shikha Sinha <[email protected]> wrote:
>> Dear all,
>>
>> I am estimating an Ordinary least square (OLS) and Instrument
>> variable
>> (IV) model, however the signs are opposite to each other. The OLS
>> coeff is negative, while the IV coeff is positive. Could anyone
>> explain what the signs in these two models are different- is there
>> any econometric reason for this?
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