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A Regression Mystery, Solved

All the economists who read this blog will no doubt be familiar with the popular instrumental variables (IV) regression technique, which is used to estimate the coefficient of endogenous variables. But who established the technique as a solution to the identification problem? IV regression was first mentioned as a solution in the appendix of a 1928 book by Philip Wright; however, there’s considerable debate surrounding the identity of the appendix’s author. Authorship has been attributed, at various times, to both Philip Wright and his son, the statistician Sewall Wright. A few years ago, James Stock and Francesco Trebbi set out to answer that question by analyzing the writing style in the appendix. The authors concluded that the evidence “points toward Philip as being both the author of Appendix B and the man who first solved the identification problem.” [%comments]