'Variables are properly classified as exogenous or endogenous o... | Filo

Endogenous Variable and Exogenous Variable: Definition and Classifying

What is the difference between endogenous and exogenous variables, considering the determinates of demand.

[GET ANSWER] i. In the model with one endogenous explanatory variable, one exogenous explanatory variable, and one extra exogenous variable, take the reduced form for y2(15.26), and plug it into the structural equation ( 15.22 ). This gives the reduced form for y1 : y1=α0 α1 z1 α2 z2 v1Find the αj in terms of the βj and the πjii. Find the reduced form error, v1, in terms of u1, v2, and the parameters.iii. How would you consistently estimate the aj ?

Endogenous and exogenous variables... | Filo