Instrument Validity

[@nazav6034]

yep, the shorthand is to refer to Sargan as the test of validity of instruments but it's sort of a misnomer; it's an overid test and this video explains exactly why. brings back memories of grad school days.

[@zhizhongpu8937]

Great intuition on overidentification test! Thanks!

[@leplusbeaudesmathious]

So unfortunate to don't show how overidentifying test works, and just give a stata command.... so we will run the stata command without understanding how it works behind... pretty useless