# 11-088/4 (2011-06-11)

Maurice J.G. Bun, University of Amsterdam; Frank Windmeijer, University of Bristol
bias, instrumental variables, weak instruments
JEL codes:

This discussion paper has led to a publication in 'Economics Letters' 113(1), 76-79.

We consider the bias of the 2SLS estimator in the linear instrumental variables regression with one endogenous regressor only. By using asymptotic expansion techniques we approximate 2SLS coefficient estimation bias under various scenarios regarding the number and strength of instruments.