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📜 SIDE QUEST · DEEP DIVE · ◆◆◆◆◆ · ~11 min

Endogeneity & Instrumental Variables

Endogeneity & Instrumental Variables

"When a regressor is tangled up with the error, no amount of data fixes OLS. Instrumental variables find a lever that moves x for reasons unrelated to y — a first look at causal inference's core trick."

endogeneity: OVB, simultaneity, measurement errorthe instrument: relevance + exclusiontwo-stage least squares (2SLS)weak and invalid instruments
🚀 You're jumping ahead. This builds on Omitted Variable Bias — but play it now and you'll still earn full XP. If it feels steep, those make a gentler on-ramp.

A short lesson, then a quiz. ❤️×3 — a wrong answer costs a heart; finish with at least one left and the level is yours. Lose all three and you'll have to try again. Replay any time — XP and cleared levels are never lost.