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    GlossaryInstrumental Variable Analysis

    statistical method to estimate causal effects using external variables

    Instrumental Variable Analysis (IV Analysis) is a statistical method used to estimate causal relationships when controlled experiments are not feasible. It involves using an "instrumental variable" that is correlated with the independent variable but not with the error terms in the model, helping to address issues of endogeneity and confounding variables. This technique is particularly useful in fields like economics and epidemiology, where randomized controlled trials are often impractical.

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