Question

which of the following must be undertaken when the treatment and control groups differ with regard to some independent variable, x1. which of the following must be undertaken when the treatment and control groups differ with regard to some independent variable, x1. run an intention-to-treat analysis run a 2sls model where the instrument is the random assignment use multivariate ols and control for x1. restart the experiment and pick a new randomized sample.

Answer 1

Run a 2SLS model where the instrument is the random assignment option B is the right answer.

As is common knowledge, when dealing with the endogeneity issue in OLS, 2SLS is employed as an alternative strategy. When the instrumental variable is used in 2SLS and the explanatory variable correlates with the error term, the endogeneity problem is resolved. Therefore, it must be done when the treatment and control groups differ with regard to an independent variable, X1, which will indicate a biased outcome.

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