Endogeneity (econometrics)
= Endogeneity (econometrics)
{wiki=Endogeneity_(econometrics)}
Endogeneity is a key concept in econometrics that refers to a situation where an explanatory variable is correlated with the error term in a regression model. This correlation can arise from several sources, including: 1. **Omitted Variable Bias**: This occurs when a model excludes a variable that affects both the independent and dependent variables, leading to a bias in the estimated coefficients.