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st: Re: probit and ordered probit eqns in a simultaneous system
I posted this query to the list last week but unfortunately noone has
had the opportunity to respond as yet. I am posting it again in case
someone is now able to help. Or if my query is an inappropriate one for
the list, perhaps someone can let me know.
Michael Alexander wrote:
I have a particular econometric problem that I am trying to analyse in
Stata. I am trying to model employment of mothers (binary dependent
variable) with the inclusion of self-reported health as an explanatory
variable. I am postulating that self-reported health (a five-level
categorical variable) is endogeous to employment. Following Cai and
Kalb (2006) I am also postulating that labour force status is also a
determinant of self-reported health (although this is of secondary
importance to me).
Consequently, my modelling approach was to do a system of two
equations (one for LFS and one for self-reported health) and estimate
them simultaneously. Unfortunately, I have only found the -mvprobit-
command which will sort of allow me to model this, but only if I
convert my self-reported health variable to a binary variable. What I
ideally need is a command that will allow me to simultaneously model
a binary dependent variable (employment) and an ordinal categorical
dependent variable (self-reported health, which has five-levels). Does
such a command exist? Or am I able to build my own estimator ? (Not
something I am keen on as I haven't done a lot of programming but am
willing to give it a go if this is the only approach).
An alternative approach would be to not worry about the impact of LFS
on self-reported health and only focus on the endogenous nature of
self-reported health on employment. That way I could use an
instrumental variable approach to dealing with the endogeniety of
self-reported health in an employment equation. But as far as I can
make out, this still requires me to model self-reported health as a
binary variable (using -ivprobit-). Can I use an instrumental variable
approach even when my endogeous variable is (ordinal) categorical.
Thanks in anticipation
Cai, L. and Kalb, K. (2006), 'Health Status and Labour Force
Participation: Evidence from the HILDA Data', Health Economics, vol.
15, March, pp. 241-261.
Principal Research Fellow
Australian Institute of Family Studies
300 Queen Street
Melbourne VIC 3000
Tel: 03 9214 7841
Fax: 03 9214 7839
Mob: 0419 406 078
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