Dear all,

In order for an IV to have power, is it enough for it have a
statistically significant correlation with the endogenous regressor or
is there also some magnitude threshold for this coefficient?  Would an
IV that has a statiscally significant correlation with the endogenous
regressor, but it's coefficient is just say 0.50, a valid strong
instrument?  Or would it be too weak?

I read this can be checked by the reduced form regression (ie,
regressing the dv of interest on the exogenous controls and the
proposed IV) and then comparing if the coefficient for the latter is
similar to the one obtained in the iv-regression (2sls, for example).
Could anyone please clarify what "similar" means here?  Is it enough
if the have the same sign but former is barely significant and the
latter is not?

Thanks so much.  I learn a lot from all the exchanges on the list.

happy new year

**********************************************************
             Political Methodology E-Mail List
   Editors: Melanie Goodrich, <[log in to unmask]>
            Delia Bailey, <[log in to unmask]>
**********************************************************
        Send messages to [log in to unmask]
  To join the list, cancel your subscription, or modify
           your subscription settings visit:

          http://polmeth.wustl.edu/polmeth.php

**********************************************************