Two-Stage Least Squares (2SLS) is a statistical method used to estimate the relationships between variables when there is endogeneity, meaning that an independent variable is correlated with the error term. This often occurs in situations where a variable is influenced by unobserved factors. 2SLS helps to provide more accurate estimates by addressing this issue. The first stage of 2SLS involves identifying and using instrumental variables, which are correlated with the endogenous independent variable but not with the error term. In the second stage, these instruments are used to predict the dependent variable, allowing for a more reliable estimation of the causal relationship between the variables involved, such as in econometric studies involving economics or social sciences.