Exact(3)
We say this model is correctly specified if such that.
We say this model is correctly specified if such that is the true distribution of given. is estimated by, its MLE using only the data on individuals.
Assume this model is correctly specified, i.e., there exists a for which equation (4) holds, and that (5) Then (i) is a consistent estimator of ; (ii) if includes (i.e., for some matrix of constants ), is an asymptotically (N→∞) unbiased estimator of ; and iii) if includes and is a consistent estimator of.
Similar(5)
This approach assumes that the model is correctly specified.
If the model is correctly specified and the effects are constant throughout the population, this does not present a problem, other than the lowered sample size widening the confidence intervals.
Finally, the likelihood ratio (LR) test was used to verify if the model is correctly specified.
A series of statistical tests suggests that our instruments are valid and that the model is correctly identified: the model passes the tests for under-, weak- and overidentification.
In addition, the RESET test (with a p value of 0.3887) indicates that the model is correctly specified with no omitted variables.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com