Topic summary
Exogenous factor
Extracted from the Wikipedia article Exogeny.
Exogenous factors in econometrics
In econometrics, an endogenousrandom variable is correlated with the error term in the econometric model, while an exogenous variable is not. However, exogenous variables aid in the explanation of endogenous variable variances. In the preset group, it is typical to include historical values of endogenous variables. Exogenous variables are independent of the model's disturbance term, since they are preset. They meet the same conditions as explanatory variables do in a traditional regression model.