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st: Re: reg3 and failure of the order condition
--On Wednesday, July 31, 2002 2:33 -0400 Joachim wrote:
In this syntax for the reg3 command, Stata is figuring out what are the
endogeneous and exogeneous variables in your model. Since you have two
equations, the endogeneous variables are taken as salary and tenure. For a
simultaneous equation to be identified, it is necessary but not sufficient
to satisfy the order condition, which may be stated in different ways, but
most simply means that the exogeneous variables EXcluded from each equation
must be at least as numerous as the endogeneous variables INcluded on each
Dear Stata users,
I was trying to use the reg3 command in Stata7 to determine a basketball
player's wage and team tenure via reg3:
The estimation is:
reg3 (salary tenure tenure2 experience experience2 draft player size all
star games direct performance indirect performance) (tenure draft all star
games direct performance indirect performance experience experience2
However an error message popped up:
Equation is not identified--does not meet order conditions
Equation salary : salary tenure tenure2 experience experience2 draft all
star game player size direct performance indirect performance
Exogenous variables: tenure2 experience experience2 draft all star game
player size direct performance indirect performance
Any help out there?
Thank you very much
For the second equation, only tenure is endogeneous, so that this equation
could be consistently estimated with OLS (e.g. the model is recursive).
For the first equation, both endogeneous variables appear; thus the order
condition fails, 0 < 1, as there are no available instruments for tenure.
You must have at least one exogeneous variable in the system excluded from
this eqation, and it does not appear that this is so (well, Stata's
calculation is better than my eyesight).
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