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From |
Austin Nichols <austinnichols@gmail.com> |

To |
statalist@hsphsun2.harvard.edu |

Subject |
Re: st: Iv reg estimates are too large in stnd errors |

Date |
Fri, 20 Nov 2009 10:08:04 -0500 |

I second Maarten: the large SE reflects the large variance inherent in IV. Note that http://papers.nber.org/papers/w10281 indicates the effect of sex mix on subsequent fertility is about .02 to .04 so you will not be using a lot of the variation in your endog var. However: note two other points--if you have survey data, you should not use [aw= but instead [pw= and you should cluster to get more correct SEs. Also, you have a binary RHS endog var and binary outcome so you may prefer another estimator, e.g. -biprobit- or -cmp- (on SSC). Also, why not consider boyfirst an excluded instrument? Is the worry that some families who observe the sex before birth choose not to have a girl first? On Fri, Nov 20, 2009 at 8:13 AM, Maarten buis <maartenbuis@yahoo.co.uk> wrote: > --- 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 * * 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/

**Follow-Ups**:**Re: st: Iv reg estimates are too large in stnd errors***From:*sjsamuels@gmail.com

**References**:**st: Iv reg estimates are too large in stnd errors***From:*Shruti Kapoor <kapoor@oxy.edu>

**Re: st: Iv reg estimates are too large in stnd errors***From:*Maarten buis <maartenbuis@yahoo.co.uk>

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