In two stage least squares estimation, when the matrix Z of predetermined variables has less than full column rank, Z'Z is singular. It is shown that in this situation 2SLS still can be used and that Y - the result of the first stage--is still uniquely determined; also shown is that 2SLS will often be equivalent to OLS.
MLA
Fisher, Walter D., and Walter J. Wadycki. “Estimating a Structural Equation in a Large System.” Econometrica, vol. 39, .no 3, Econometric Society, 1971, pp. 461-465, https://www.jstor.org/stable/1913260
Chicago
Fisher, Walter D., and Walter J. Wadycki. “Estimating a Structural Equation in a Large System.” Econometrica, 39, .no 3, (Econometric Society: 1971), 461-465. https://www.jstor.org/stable/1913260
APA
Fisher, W. D., & Wadycki, W. J. (1971). Estimating a Structural Equation in a Large System. Econometrica, 39(3), 461-465. https://www.jstor.org/stable/1913260
The Executive Committee of the Econometric Society has approved an increase in the submission fees for papers in Econometrica. Starting January 1, 2025, the fee for new submissions to Econometrica will be US$125 for regular members and US$50 for student members.
By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device. Cookies are used to optimize your experience and anonymously analyze website performance and traffic.
