Hi everyone, I have two structural equations of the following form:
Y1= a Y2+ b X1 Y2= c Y1+ d X2 I first etimated these two equations using OLS (i.e. ignoring endogeneity). Next I estimated them using 2sls. Essentially what happened was the endogeneous variables (Y2,Y1) changed signs (went from positive significant to negative significant). I was wondering if this was cause for concern. Does it reflect some underlying problems with the data/ model? Or is this just an outcome of endogeneity? I should mention 3sls produced coefficients with the same signs as 2sls. Any insight would be much appreciated. Thanks! sk . . ================================================================= Instructions for joining and leaving this list, remarks about the problem of INAPPROPRIATE MESSAGES, and archives are available at: . http://jse.stat.ncsu.edu/ . =================================================================
