Hi all,
I have a binary outcome variable (y) that I am modeling as a function of
two independent variables (x1 and x2). x2 is also binary (0/1). The
question I have relates to the fact that for all observations where the
value of x2=1, the value of y=1. (When x2=0, y=0 for some observations
and y=1 for others). When I attempt to estimate a logit model (logit y x1 x2),
STATA drops the observations where x2=1 and estimates the model for the
other observations. Specifically, the output says the following:
note: x2~=0 predicts success perfectly
x2 dropped and 36 obs not used
The same thing happens with a probit model (probit y x1 x2). If willing
to violate assumptions, I can use OLS (regress y x1 x2) and keep all the
observations. Can someone explain to me why STATA drops the observations
when I use logit or probit? Thanks, in advance. --Ben
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