Overidentification Tests with Grouped Data
27 Pages Posted: 19 Jul 2000 Last revised: 13 Aug 2010
Date Written: February 1998
This paper examines the validity of overidentification tests and exogeneity tests in the presence of grouped data. We find that even a small intra-group correlation, when instruments do not vary within groups, may generate a substantial bias in the standard overidentification tests described in textbooks.
Suggested Citation: Suggested Citation