<p>Hello I want to find a instrument variable for airline "bankruptcy" but that instrument should not affect ticket prices? can any one help me out? I have already tried out the cash flows, current assets and liabilities. </p>

CC BY-SA 3.0
2015-09-23T16:46:39.717Z
Welcome to Economics.se! In almost all cases, the "suitability" of instruments is supported by economic reasoning and arguments (both as regards their correlation with the instrumented variable, as well as their non-correlation with the error term). So what was your arguments in favor of using the instruments you mention? Also, why they should not affect ticket prices? What problem would that create? Please include this information in your question, rather than as an answer to this comment.
Alecos Papadopoulos
CC BY-SA 3.0
2015-09-24T21:05:14.983Z
We may be able to help if you can give a better synopsis of your model, the question you're hoping to answer and a bit more about the other exogenous variables in the model etc.
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<econometrics>
Suitable Instrumental Variables
naren
# Suitable Instrumental Variables

(Asked by: username_0 on 2015-09-23)

Hello I want to find a instrument variable for airline "bankruptcy" but that instrument should not affect ticket prices? can any one help me out? I have already tried out the cash flows, current assets and liabilities.

**Tags:** econometrics
> **Comments:**
> **username_1**: Welcome to Economics.se! In almost all cases, the "suitability" of instruments is supported by economic reasoning and arguments (both as regards their correlation with the instrumented variable, as well as their non-correlation with the error term). So what was your arguments in favor of using the instruments you mention? Also, why they should not affect ticket prices? What problem would that create? Please include this information in your question, rather than as an answer to this comment.  
> **username_2**: We may be able to help if you can give a better synopsis of your model, the question you're hoping to answer and a bit more about the other exogenous variables in the model etc.  

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