Dear Arne Generally I would have the following equations X_i = IV3_i + IV4_i * Y_i applying for every company (i). In a first step, I am interested in estimating the relationship between X and Y: Y_i = a + b * X_i + u to ultimatly estimate X_i by substituting the Y_i and solving for X_i to be able to estimate the X_i by just IV3_i, IV4_i, and the a and b.
Now, let's construct values from a sample of listed companies. In the capital market, I can observe IV3_i, IV4_i, and X_i. With these I calculate Y_i: Y_i = IV1_i + IV2_i * X_i (note: IV3 and IV4 are just a transformation of IV1 and IV2). Of course, I could rewrite this equation as Y_i = c + d * IV1_i + e * IV2_i * X_i + v. For a couple of observations, I have now combinations of X_i and Y_i to get the a and b coefficient by estimating Y_i = a + b * X_i + u. I hope the structure is more clear to you now. Let me know. I am looking very much forward to your answer. Best HC -- View this message in context: http://r.789695.n4.nabble.com/2SLS-TSLS-SEM-non-linear-tp4670123p4670619.html Sent from the R help mailing list archive at Nabble.com. ______________________________________________ R-help@r-project.org mailing list https://stat.ethz.ch/mailman/listinfo/r-help PLEASE do read the posting guide http://www.R-project.org/posting-guide.html and provide commented, minimal, self-contained, reproducible code.
