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From |
"Marc F. Bellemare" <mfb24@cornell.edu> |

To |
statalist@hsphsun2.harvard.edu |

Subject |
Re: st: biprobit |

Date |
Wed, 13 Oct 2004 07:21:31 -0400 |

Hi Victoria:

A bivariate probit will estimate a pair of probits. For example, you might want to estimate simultaneously whether or not a college student works during a given semester (y_{1} = 1 if she works, 0 otherwise) and whether or not she drops out of school (y_{2} = 1 if she drops out of school, 0 otherwise). If you need to see the likelihood function of the bivariate probit, turn to Maddala (1983) (maybe Gouriéroux, 2001, also has it).

It can be used whenever you have a simultaneous or sequential pair of probits. The coefficients are indeed consistent, assuming the hypotheses of maximum likelihood estimation are satisfied and the regularity conditions hold true.

The main question is: should you estimate a bivariate probit or two separate probits? The biprobit command will return a correlation coefficient ("rho") which is the correlation coefficient between the residuals of each of the two probits. If rho is statistically significantly different from zero, then you should estimate the two probits simultaneously. If rho is not statistically significantly different from zero, then you can stick to estimating two separate probits.

Marc

At 09:13 AM 10/13/2004 -0300, you wrote:

Hi, I need your help. Does anybody knows exactly, theoretically speaking, what the biprobit comando does? When exactly can be used? Are the coefficients consistent? Thank you all for your help. Victoria ROdriguez * * For searches and help try: * http://www.stata.com/support/faqs/res/findit.html * http://www.stata.com/support/statalist/faq * http://www.ats.ucla.edu/stat/stata/

__________ Marc F. Bellemare Ph.D. Candidate Department of Applied Economics and Management Cornell University Ithaca, NY 14853-7801 http://www.people.cornell.edu/pages/mfb24 * * For searches and help try: * http://www.stata.com/support/faqs/res/findit.html * http://www.stata.com/support/statalist/faq * http://www.ats.ucla.edu/stat/stata/

**Follow-Ups**:**st: IVProb***From:*"Rodriguez, Maria Victoria" <rodriguez_mv@ort.edu.uy>

**References**:**st: biprobit***From:*"Rodriguez, Maria Victoria" <rodriguez_mv@ort.edu.uy>

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