Simultaneity Bias

In Econometrics, we usually run regression that we initially believe that $X\to Y$, but what if $Y\to X$ ? That is called Simultaneity Bias. we could represent $X=f(Y)$

$$Y={\beta }_0+{\beta }_{1}f(Y)+u$$

Other problems about the Endogeneity Issue:

• Omitted Variable Bias
• Measurement Error
• Ordinary Least Squares is inconsistent when there is Endogeneity Issue