Hi Statalist,

I met a problem when I was using the IV approach to estimate an equation, I am using Stata 14 and ivreg2.

The equation takes the following form:

y=c+a*X1+b*X2+eps

and I instrument X1 with Z.

After doing the IVreg2, the coefficient a has the same sign as OLS but coefficient b flips to the opposite sign.

What could this suggest? or why would this happen?

Best
Xu