Why is it helpful to think about the moment conditions of a simple linear regression even if OLS yields the same estimates?
A) The moment conditions are easier to program in Excel.
B) The moment conditions will get the smaller standard errors.
C) The moment conditions establish causality whereas OLS just estimates correlation.
D) The moment conditions facilitate assessing assumptions about causality.

Question

Quizplus · Accepted Answer

The moment conditions can help assess assumptions about causality in the regression model, which is important for establishing the true relationship between the variables. While OLS may yield the same estimates as the moment conditions, it does not necessarily establish causality in the same way. Additionally, the moment conditions can aid in identifying potential sources of bias or omitted variable effects.

Why Is It Helpful to Think About the Moment Conditions