189 IV12 OLS vs IV comparison

Choosing between OLS and IV in econometrics can be confusing, as many students assume IV is always superior. This video clarifies that the best choice depends on the presence of endogeneity. We break down the strengths and weaknesses of both OLS and IV estimators, explaining when each is most appropriate for accurate causal inference. Learn why OLS is preferred when assumptions hold and the significant costs associated with using IV unnecessarily. Understand the critical trade-offs and how to make informed decisions in your empirical work. Visit AxiomTutoring.com and subscribe to @AxiomTutoringCourses.