during my 2SLS-Regression I have a problem with an error popping up that says:
Error in solve.default(vcov.hyp) :
system is computationally singular: reciprocal condition number = 2.85793e-17
It appears, when I call the summary. The regression itself works actually and the results are saved in the environment. Any ideas, what is the problem?
What does the error message mean actually? I found that the error it has to do with singular matrices and that it might appear, or if there are too many variables. Is that correct? In fact I have 8 exogenous variables and 13 instruments and I don't get the error in a standard linear regression. But anyways I have a very similar analysis with 8 variables and 35 instruments that works fine. As a solution I found that I might change the tolerance in the "solve" function, but not sure how to do that in the summary function. So help or a bit of explanation is highly appreciated. Thanks in advance.