<p>I am considering instrumenting HIV with ODA, to evaluate the impact of HIV on gold mining. There is a clear relationship between HIV and ODA, however it may easily be argued this is an endogenous relationship. There is nothing I have found in the literature to say this would invalidate the instrument - we would use this instrument to assess the exogenous impact of HIV on gold. There is no relationship between ODA and gold production. </p>

<p>Has anyone come across a paper that addresses such an issue with their choice of instrument? I think it could possibly impact the interpretation of the sign of the first stage coefficient. </p>

<p>Thanks.</p>

CC BY-SA 3.0
2018-02-18T16:26:42.527Z
My knee jerk reaction is that an endogeneity issue like this could cause issues when obtaining fitted values in the 1st stage that spill over into estimates produced by your second stage.
123
CC BY-SA 3.0
2018-02-19T23:34:45.277Z
Your post is unclear, please clarify 1) What HIV and ODA stand for? 2) In what sense the relationship between these two is "endogenous"? 3) What is the dependent variable in your econometric specification? 4) Why are you considering "instrumenting HIV" in the first place?
Alecos Papadopoulos
<instrumental-variable>
Using an instrument in IV that is not strictly exogenous to the variable it is instrumenting?
C. Hansen
# Using an instrument in IV that is not strictly exogenous to the variable it is instrumenting?

(Asked by: username_0 on 2018-02-18)

I am considering instrumenting HIV with ODA, to evaluate the impact of HIV on gold mining. There is a clear relationship between HIV and ODA, however it may easily be argued this is an endogenous relationship. There is nothing I have found in the literature to say this would invalidate the instrument - we would use this instrument to assess the exogenous impact of HIV on gold. There is no relationship between ODA and gold production.

Has anyone come across a paper that addresses such an issue with their choice of instrument? I think it could possibly impact the interpretation of the sign of the first stage coefficient.

Thanks.

**Tags:** instrumental-variable
> **Comments:**
> **username_1**: My knee jerk reaction is that an endogeneity issue like this could cause issues when obtaining fitted values in the 1st stage that spill over into estimates produced by your second stage.  
> **username_2**: Your post is unclear, please clarify 1) What HIV and ODA stand for? 2) In what sense the relationship between these two is "endogenous"? 3) What is the dependent variable in your econometric specification? 4) Why are you considering "instrumenting HIV" in the first place?  

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