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Consider the simplest textbook instrumental variables (IV) model with one endogenous regressor and a single valid instrument . You are given the estimated slope coefficient from the reduced form regression of on along with its standard error . You are also given the estimated slope coefficient from the first stage regression of on . The IV estimate equals . Does its sta...


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Today’s challenge is to do a power calculation in your head. No paper, no pencils, no normal tables, and no statistical software packages are allowed!

Suppose you observe independent draws from each of two normally distributed populations. For simplicity, assume that both populations have a common variance , assumed known. You plan to carry out a test of the ...


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