4 ms·
We're modeling rent drops using tenancy length as an input. However, tenancy length is also affected by rents compared to market. Since the output also affects
by ulucs 6y ago
We're modeling rent drops using tenancy length as an input. However, tenancy length is also affected by rents compared to market. Since the output also affects the input, we have endogeneity in an econometrics sense and blindly estimating the equation will give us wrong numbers.
- fuzzybear3965 6y agoAhhhh, it's a closed-loop feedback system, a function that depends on itself. Endogenous. Got it. Thanks!