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| = Exogeneity = In econometrics, '''exogeneity''' is an assumption about data used for statistical inference. <<TableOfContents>> ---- == Meaning == Exogeneity means that all treatment and control variables are independent of the outcome variable and the error term. So an assumption of exogeneity would be violated if... * confounding variables were omitted * in time series models, a lagged dependent variable can be correlated to the error term * if OLS is mistakenly used on a system of equations (i.e. '''simultaneous equation bias''') In a [[Econometrics/OrdinaryLeastSquares|mulivariate OLS regression]], the assumption of exogeneity can be expressed mathematically as: {{attachment:exogeneity.svg}} ---- CategoryRicottone |
