Table 6

Instrumental variables test for strength and validity

p-values
TSLS 1TSLS 2
Stock and Yogo0.00650.0007
Hansen–Sargan0.67690.4863

Note(s): Stock and Yogo (2004) test for weak instruments evaluates the strength of the first stage regression. Low p-values suggest strong instruments. Hansen–Sargan is a test for overidentifying restrictions, testing the joint significance of the set of endogenous variables in the system of equations. It has a chi-square distribution. High p-values suggest that instruments are valid.

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