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How to test X affects Y through M

asked 2016-01-16 08:04:33 +0000

HARVEY gravatar image

Have a simple question. I have a dep. variable Y and an independent variable, X. X also affects another binary variable M and M affects Y. I want to show that X affects Y through M. M is exogenous. This is my strategy. In Step 1, I estimate a uni variate logit model of M on X. Get the predicted values. This is the portion of M that is explained by X only. I then use these predicted values as an independent variable to predict Y. If the coefficient is significant, I know X affects Y through M. Is this ok? Is there a cite or reference to show this can be done.

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answered 2016-01-21 10:55:30 +0000

updated 2016-02-14 12:20:46 +0000

This looks ok. Because Y does not affect X or M it is not a 2SLS problem. Most introductory econometrics or statistics textbooks should cover this.

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Asked: 2016-01-16 08:04:33 +0000

Seen: 1,457 times

Last updated: Feb 14 '16