172 Endogeneity introduction

This video introduces the fundamental econometrics concept of endogeneity, explaining its intuition and implications. Endogeneity arises when a regressor is correlated with the error term, invalidating key OLS assumptions and leading to biased and inconsistent estimates. We explore how omitted variable bias is a specific case of endogeneity, and discuss other sources like reverse causality and measurement error. Understanding endogeneity is crucial for causal inference, as it prevents the clean interpretation of regression coefficients as causal effects. Visit AxiomTutoring.com and subscribe to @AxiomTutoringCourses.