Two-Stage Least Squares
Index Tutorial Glossary  

Runs the two-stage least squares regression model. The equations of the model are specified one by one in the LHS Variable and Regressors boxes. In order to switch between equations, use the "Go to next" and "Go to previous" buttons. The system will indicate which equation is currently edited by displaying the number of the equation (in the order they had been entered). The procedure automatically creates sets of dummy variables corresponding to categorical variables. For each categorical variable, the category with the most observations is omitted from the regression and becomes the reference category.

Procedure

To run the two-stage least squares regression model, select Two-Stage Least Squares in the drop-down Analysis box. Select the dependent variable in the Variables box and click on the button. The variable will appear in the LHS Variable box. Select regressors in the Variables box and click on the second button. The regressors will appear in the Regressors box. Click on the "Go to next" button and repeat the above steps for the next equation. After specifying the model, click on the button.

Sample Output

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