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On Endogeneity Bias: Some General Remarks and Correction of the ROIW Paper by Bourguignon, Ferreira, and Menéndez (2007)
Author(s) -
Krishnakumar Jaya
Publication year - 2013
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/roiw.12040
Subject(s) - endogeneity , economics , econometrics , mathematical economics , mathematics
This paper is a short note on the question of correcting for endogeneity bias in a regression. It also points out errors and omissions in the derivation of this bias in Bourguignon, Ferreira, and Menéndez (2007). We show that some assumptions needed for the derivation are not explicit and even under these assumptions, certain simplifications adopted are not valid. We support our points using simulation experiments.