Exogenous Variables

Exogenous originated from the Greek words exo (meaning “outside”) and gen (meaning “born”), and describes something generated from outside a system. It is the opposite of endogenous, which describes something generated from within the system. Exogenous variables, therefore, are variables that are not caused by any other variables in a model of interest; in other words, their value is not determined in the system being studied.

The concept of exogeneity is used in many fields, such as biology (an exogenous factor is a factor derived or developed from outside the body); geography (an exogenous process takes place outside the surface of the earth, such as weathering, erosion, and sedimentation); and economics (exogenous change is a change coming from outside the economics model, such as changes in ...