New method solves endogeneity problem in statistical modeling without instrumental variables.
A new method was developed to deal with a common problem in statistics called endogeneity. This method uses a special technique called copulas to analyze the relationship between variables without needing extra instruments. Unlike other methods, this new approach doesn't require the assumption that unobserved factors are unrelated to the variables being studied. It can also handle discrete variables and solve issues with the slope of a line. The method was tested in simulations and a real-world example, showing its effectiveness in various situations.