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st: IV vs 2SLS

From   Shikha Sinha <>
Subject   st: IV vs 2SLS
Date   Thu, 2 Aug 2012 17:16:27 -0700

Dear all,

What is the difference between IV and 2sls and which is the preferred
method to correct for endogeneity (advantage and disadvantage)?

(a) ivreg2 y x1 x2 (x3=z)

(b) reg x3 z x1 x2
predict x3_hat
reg y x3_hat x1 x2

By employing (a) and (b) I get similar coeff, but standard errors are

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