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st: logY, Tobit and the prediction of Y
My initial model is:
Y = a + b1x1 + controls + e
where Y is expenditures on a commodity and x1 is income.
Since there are a lot of zeroes, I use the Tobit apporach. However, since
the log-linear model performed better than the linear, I use the former
(Before the log transformation of Y, I follow convention and set zeroes to
Accordingly, the estimated Tobit model is:
logY = a + b1x1 + controls + e
I want to predict the value of Y (not logY) for certain values of income
(and put it in a graph); that is, both the conditional Y (i.e. the Y given
that the threshold value of 0 was passed) and the unconditional (latent)
value of Y.
Does anyone know how to do this?
Lillehammer University College
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