library(AER) data("CigarettesSW") CigarettesSW$rprice <- with(CigarettesSW, price/cpi) CigarettesSW$rincome <- with(CigarettesSW, income/population/cpi) CigarettesSW$tdiff <- with(CigarettesSW, (taxs-tax)/cpi) CigarettesSW$rtax <- with(CigarettesSW, tax/cpi) CigarettesSW$lrprice <- log(CigarettesSW$rprice) CigarettesSW$lrincome <- log(CigarettesSW$rincome) CigarettesSW$lpacks <- log(CigarettesSW$packs) CSW1995 <- subset(CigarettesSW, year=="1995") fm <- ivreg(lpacks ~ lrprice + lrincome | lrincome + tdiff + rtax, data=CSW1995) summary(fm) fm2 <- ivreg(lpacks ~ lrprice | tdiff, data=CSW1995) summary(fm2) anova(fm, fm2) library(sem) M1 <- tsls(lpacks ~ lrprice + lrincome, instruments = ~ lrincome + tdiff + rtax, data=CSW1995) summary(M1)