- Thread starter zwergje
- Start date

y1 = zebra mussels

y2 = one zoo plankton

y3 = other zooplankton

x1, x2,...., x8 other explanatory variables determined outside of the system = exogenous variables

Of course it is possible to have an interdependent system, like this:

y1 = f(x1, x2,...., x8) +error1

y2 = a1+b1*y1 + g(x1, x2,...., x8) +error2

y3 = a1+b1*y1 + b2*y2 + h(x1, x2,...., x8) +error3

IF the system works like this then it is a Wold causal chain and it can be estimated with OLS

(Here basically y1, y2 and y3 influences each other.)

But if it works like this:

y1 = f(x1, x2,...., x8) +error1

y2 = a1+b1*y1 +b2*y3 + g(x1, x2,...., x8) +error2

y3 =a1+b1*y1 + b2*y2 + h(x1, x2,...., x8) +error3

then it is more complicated and could maybe be estimated with 2SLS (two stage least squares).

(There should be different parameters in each equation.)

Which sea or lake is this about?

Let

..........

Which sea or lake is this about?

..........

Which sea or lake is this about?