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Re: st: Instrumental Variable

From   Austin Nichols <[email protected]>
To   [email protected]
Subject   Re: st: Instrumental Variable
Date   Fri, 30 Sep 2011 11:12:12 -0400

Eric Uslaner <[email protected]>:
Unless the concern is solely about measurement error.  I doubt that is
the case here.
-egen- can make an average by industry and year, but of course the
interpretation is key in any IV model.

On Fri, Sep 30, 2011 at 9:00 AM, Eric Uslaner <[email protected]> wrote:
> On Thu, Sep 29, 2011 at 3:02 AM, donsaane <[email protected]> wrote:
>> I have an endogeneity problem with one my variables : corruption and I want
>> to control it with an instrumental variable: amount of bribes averages per
>> industry.
>> Is there any stata command to compute the average ? How can I construct my
>> instrumental variable?
> Sorry, but trying to instrument corruption with bribes paid is like trying to instrument Fahrenheit temperature with Celsius (from someone who has published a university press book on corruption).  Find a better instrument.

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