[Q] Why do you want to use a 2SLS instead of a multiple regression?

So I understand that you by doing a 2SLS, that you can remove some of the spuriousity by adding a Z –> X –> Y

And thus if Z and X (Z being completely random) correlates with X then you keep that part of X (the correlating with Z part) and do a new regression with Y and thus have a stronger argument of causality.

However why would you not just add it as a multiple regression together with the variables you think could affect the Y?

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Nevin Manimala

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