ENDOGENOUS VARIABLE

(Statistics) Variables which are determined solely within the series of equations of the model. Also referred to as dependent variables as their values are assumed to be dependent upon the behavior of other pre-determined or explanatory variables, referred to as Exogenous Variables. An exception to this is a Lagged Endogenous Variable, which may also be an explanatory variable but whose value is determined within the system of equations by past values of the explanatory variables. For example, in the equation below, for any time period t (where t=1, 2, ..., n), Yt = a + ß Xt + ð Yt-1 + et; where Yt represents the endogenous variable, Xt represents the exogenous variable, and Yt-1 represents the lagged endogenous variable. Also referred to as the Dependent Variable or the variable to be explained (Explained Variable).