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A cautionary note on tests for overidentifying restrictions

  • Paulo M.D.C. Parente
  • J.M.C. Santos Silva


Tests of overidentifying restrictions are widely used in practice. However, there is often confusion about the nature of their null hypothesis and about the interpretation of their outcome. In this note we argue that these tests give little information on whether the instruments are correlated with the errors of the underlaying economic model and on whether they identify parameters of interest.

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Paper provided by University of Essex, Department of Economics in its series Economics Discussion Papers with number 699.

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Date of creation: 11 Nov 2011
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Handle: RePEc:esx:essedp:699
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  9. Helena Holmlund & Mikael Lindahl & Erik Plug, 2010. "The Causal Effect of Parents' Schooling on Children's Schooling - A Comparison of Estimation Methods," CESifo Working Paper Series 3234, CESifo Group Munich.
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