Mission accomplished: A reply to Reuveny and Keshk

Reuveny and Keshk (“Reconsidering trade and conflict simultaneity: The risk of emphasizing technique over substance,” this issue, 2013) argue that the econometric techniques used by Goenner ( Conflict Management and Peace Science 28(5): 459–477, 2011) to test and control for endogeneity when estimating the relationship between trade and conflict lack substance. Both sets of authors propose the use of instrumental variable methods, which are known by econometricians to be the natural remedy for estimation with potentially endogenous regressors. Where Goenner (2011) and Reuveny and Keshk (2013) agree is that theory should guide variable selection and the model’s specification. Yet they differ in that, while econometric tests cannot replace theory, one should not trust the appropriateness of the model’s specification based on theory alone – one should also verify. Otherwise, as Goenner (2011) notes, attempts to control for endogeneity may fail.