Exogeneity refers to a condition in statistical models where a variable is not influenced by other variables in the system. In simpler terms, an exogenous variable is one that is determined outside the model and does not depend on the internal dynamics of the model. This concept is crucial in econometrics and helps ensure that the relationships being studied are not biased by feedback effects. In contrast, an endogenous variable is influenced by other variables within the model. Understanding the difference between exogeneity and endogeneity is essential for accurate analysis in fields like economics, where researchers often use models to predict outcomes based on various factors, such as economic policies or market trends.