use "Problem_Set_05_Data.dta", clear

* a) Estimate parameters

reg y x2 

* b) Test hypothesis

test x2=1

* c) Do IV as two times OLS

* First stage 
reg  x2 x3

* Save fitted values
predict x2h, xb

* Second stage
reg y x2h

* e) Do IV regression

ivreg y (x2 = x3)

* f) Test hypothesis

test x2=1