What is an Endogenous Variable

In a mathematical model, an endogenous variable is a variable that is modified or defined by its relationship within the model to other variables. In some terms, an endogenous variable is associated with a dependent variable, implying that throughout the mechanism under tested, it interacts with other variables.

An exogenous variable is one in an economic model, the value of which is calculated outside the model and placed on the model, and an exogenous change is a change in an exogenous variable. An endogenous variable, by comparison, is a variable whose value is determined by the formula.

Under the causal model M, a vector xj is said to be endogenous if its value is calculated or affected by one or more of the independent variables X (excluding itself). A strictly endogenous variable is a component that is absolutely defined in the system by the states of other factors. An endogenous variable in a mathematical model is a variable that is modified or defined within the model by its interaction with other variables.

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