On the Practice of Lagging Variables to Avoid Simultaneity

A common practice in applied economics research consists of replacing a suspected simultaneously determined explanatory variable with its lagged value. This note demonstrates that this practice does not enable one to avoid simultaneity bias. The associated estimates are still inconsistent, and hypot...

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Bibliographic Details
Published in:	Oxford bulletin of economics and statistics Vol. 77; no. 6; pp. 897 - 905
Main Author:	Reed, William Robert
Format:	Journal Article
Language:	English
Published:	Oxford Blackwell Publishing Ltd 01.12.2015 Wiley-Blackwell
Subjects:	Applied economics Economic research Economic theory Economics Effectiveness studies Endogenous Estimating techniques Estimation Estimation bias Hypothesis testing Internet Lagged variables Research methodology Reverse causality Simultaneity Valuation methods
ISSN:	0305-9049, 1468-0084
Online Access:	Get full text
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