(Requires Chapter 8)When using panel data and in the presence of endogenous regressors
A)the TSLS does not exist.
B)you do not have to worry about the validity of instruments, since there are so many fixed effects.
C)the OLS estimator is consistent.
D)application of the TSLS estimator is straightforward if you use two time periods and difference the data.

Question

Quizplus · Accepted Answer

The Two-Stage Least Squares (TSLS) estimator can be applied straightforwardly when using panel data with two time periods by differencing the data. This approach helps to eliminate individual-specific effects that could bias the OLS estimates, making TSLS a viable method for dealing with endogenous regressors in panel data settings.

(Requires Chapter 8)When Using Panel Data and in the Presence