I check the code from 10.0 version as follow

I'm confused about the 2 step Least Squares in the codes:

instruments constant ind ed union fem

linreg(inst) wks

# constant lwage ed union fem

would you please show me the first and the second regression equations?

And I'm confused about which one is the endogenous variable here?

Thank you.

Frank

- Code: Select all
`* Greene, Econometric Analysis, 7th Edition Example 8.2 from pp 228`

*

open data tablef8-1.csv

calendar(panelobs=7,a) 1976

data(format=prn,org=columns) 1//1976:01 595//1982:01 exper wks occ ind $

south smsa ms fem union ed blk lwage

*

set expersq = exper^2

table

linreg wks

# constant lwage ed union fem

*

* Instruments are set using the INSTRUMENTS instruction. Then you add

* the INST option to LINREG to get the IV estimates.

instruments constant ind ed union fem

linreg(inst) wks

# constant lwage ed union fem

*

instruments constant ind ed union fem smsa

linreg(inst) wks

# constant lwage ed union fem