Given the structural model
Based on the order condition, the second equation is:
Tap an option to check your answer.
UGC-NET 2025 Question 64: Endogeneity, instruments and simultaneous equations
Answer and worked solution
Checking your account…
Plain-text version
Given the structural model y₁ = 3y₂ - 2x₁ + x₂ + u₁ y₂ = y₃ + x₃ + u₂ y₃ = y₁ - y₂ - 2x₃ + u₃ Based on the order condition, the second equation is: (A) over identified (B) exactly identified (C) under identified (D) information not sufficient
Also written as: Given the structural model y_1 = 3y_2 - 2x_1 + x_2 + u_1 y_2 = y_3 + x_3 + u_2 y_3 = y_1 - y_2 - 2x_3 + u_3 Based on the order condition, the second equation is:
Endogeneity, instruments and simultaneous equations has come up 8 times in 3 exams since 2021.
What this question tests
This question is on Simultaneous equations: identification and estimation, part of Endogeneity, instruments and simultaneous equations in Econometrics.
When a system of equations can be estimated and by which method.
TestStop has 6 past-paper questions on this subtopic; the nearest in year are below.
Similar questions from other papers
- In a Simultaneous equation model the OLS can be applied if:
- Two-stage least squares (2SLS) is applied to estimate the coefficients of the:
- Consider the following system of equations: Y₁ = α₀ + α₁ Y₂ + α₃ Y₃ + α₄ X₁ + α₅ X₂ + U₁ Y₂ = β₀ + β₁ Y₃ + β₂ Y₁ + β₃ X₂ + U₂
- Sequence of steps followed in the estimation of Indirect Least Squares (ILS), starting from the beginning. A. Identification of the structural equations B. Application…
Question from the UGC-NET 2025 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.