I apologize for the naivete of this question, but I am wondering if I could get some advice and clarity on how to use an instrumental variables approach to dealing with a confounded / endogenous X variable in a structural equations setting? The endogenous X variable is dichotomous, the instruments are continuous, and I would like to use all of the exogenous X variables as predictors of the endogenous X variable as well.
Would I be correct in assuming that I can do this by simply writing the aforementioned structure into the model? If so, is this the most efficient way to go about setting up an instrumental variables analysis, or is there a more streamlined way to tell Mplus what it is I am trying to do?
As always, thank you very much in advance for your assistance in this matter!
Thank you very much - I was able to get some very helpful information!
Jon H posted on Thursday, September 17, 2015 - 3:58 pm
I may have asked about this earlier, but I know in many programs the default estimator for an analysis using instrumental variables is two-stage least squares. I know Mplus doesn't have 2SLS, but is there an estimator in Mplus you would recommend that would accomplish the same tasks? Any papers on this topic that use Mplus and instrumental variables?