Master 2-Stage Least Squares Without Any Mathematics

Learn the intuition of logic of 2-Stage Least Squares Without Any Mathematics At All!

What you'll learn

Understand the endogeneity bias

Understand how the 2-Stage Least Squares model can mitigate the endogeneity bias

Identify potential instrumental variables for the 2-Stage Least Squares model

Understand the mechanics of the Durbin Wu-Hausman Test for endogeneity

Understand how to test for the strength and validity of instrumental variables

Estimate the 2-Stage Least Squares model in Stata and EViews

Conduct the diagnostic tests of the 2-Stage Least Squares model in Stata and EViews

Excel in their formal learning of the 2-Stage Least Squares model by building upon what is learnt in this course

Requirements

Basic knowledge of Regression Analysis

Basic understanding of P-Values in Hypothesis Testing

Description

Welcome to my on 2-Stage Least Squares (2SLS). This course is carefully designed for students/researchers who are learning 2SLS for the first time and who are not quantitatively inclined. In fact, this course is entirely NON-MATHEMATICAL! This course is perfect for learning the intuition and logic of 2SLS and its corresponding diagnostic tests before formally learning the derivation and mathematics from an econometrics course or textbook. Moreover, this course covers the application of 2SLS and its diagnostic tests using two of the most popular econometrics software packages, Stata and EViews. At the end of this course, the student will have a clear understanding of why 2SLS is used and how it is implemented, and be able to estimate a 2SLS model using empirical data.

Overview

Section 1: The Non-Mathematical Theory of 2-Stage Least Squares

Lecture 1 Introduction to Section 1

Lecture 2 Correlation vs Causation

Lecture 3 The Assumption of Strict Exogeneity

Lecture 4 The Endogeneity Bias

Lecture 5 The Fix: An Instrumental Variable

Lecture 6 Introducing the 2-Stage Least Squares Model

Lecture 7 Hunting for an Instrument for Wages and Education

Lecture 8 Testing the Strength of the Instrumental Variable

Lecture 9 Testing the Validity of the Instrumental Variable

Lecture 10 Testing for Endogeneity

Section 2: Applying 2-Stage Least Squares in Stata

Lecture 11 Introduction to Section 2

Lecture 12 Stata: Importing Data

Lecture 13 Stata: Estimating an OLS Regression

Lecture 14 Stata: Estimating the 2-Stage Least Squares Regression

Lecture 15 Stata: Conducting the Diagnostic Tests of the 2SLS Model

Lecture 16 Stata: A Second Example Using Airfares Data

Section 3: Applying 2-Stage Least Squares in EViews

Lecture 17 Introduction to Section 3

Lecture 18 EViews: Importing Data

Lecture 19 EViews: Estimating an OLS Regression

Lecture 20 EViews: Estimating the 2-Stage Least Squares Regression

Lecture 21 EViews: Conducting the Diagnostic Tests of the 2SLS Model

Lecture 22 EViews: A Second Example Using Airfares Data

Section 4: Tips for Learning 2-Stage Least Squares Formally

Lecture 23 The Best Method for Mastering the 2-Stage Least Squares Model

Section 5: Time to Test Your Understanding

Section 6: BONUS SECTION: A Primer on OLS Regressions

Lecture 24 Basic Introduction to OLS Simple Regressions

Lecture 25 Part 1 of the OLS Regressions Refresher

Lecture 26 Part 2 of the OLS Regressions Refresher

Any student or researcher who is learning the 2-Stage Least Squares model for the first time,Students or researchers who are not quantitatively inclined