Understanding Endogenous vs Exogenous Factors: A Guide to Internal and External Influences

Endogen refers to something that is produced or generated within a system, organization, or individual, as opposed to being introduced or derived from an external source. In other words, endogenous factors are those that are internally generated, rather than being caused by external forces.

For example, in economics, an endogenous variable is one that is determined within the model or system being studied, rather than being exogenously determined, or determined outside of the model. Similarly, in biology, an endogenous hormone is one that is produced internally by the body, as opposed to being introduced from outside.

In contrast, exogenous refers to something that is introduced or derived from an external source. For example, an exogenous shock is a sudden and unexpected event that originates outside of a system or model, such as a natural disaster or a change in government policy.