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1. Consider the simple linear model and let Z, be a binary instrumental variable for X,. Show that the IV estimator β1JV for A can be written as I X1-Xo where Yo and Xo are the sample averages of Y, and X, over the part of the sample with Zi = 0, and Yi and Xi are the sample averages of Yand Xi over the part of the sample with Zi = 1.
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