If L is the number of exogenous instruments and B is the number of endogenous regressors in the model,when L B the model is
A)just identified
B)over identified
C)under identified
D)perfectly identified

Question

If L is the number of exogenous instruments and B is the number of endogenous regressors in the model,when L > B the model is
A)just identified
B)over identified
C)under identified
D)perfectly identified

Quizplus · Accepted Answer

When L > B, meaning the number of exogenous instruments exceeds the number of endogenous regressors, the model is considered over identified. This situation allows for the testing of the overidentifying restrictions to assess the validity of the instruments.

If L Is the Number of Exogenous Instruments and B