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RE: st: Heckman Selection Rule


From   "Maarten Buis" <M.Buis@fsw.vu.nl>
To   <statalist@hsphsun2.harvard.edu>
Subject   RE: st: Heckman Selection Rule
Date   Fri, 31 Aug 2007 15:02:51 +0200

--- georg wernicke wrote:
> Verbeek(2000) argues that the selection equation should at least
> contain all the variables the structural equation contains. however,
> Linder and de Groot (2006) argue that the variables of the two parts
> can be different.

This answer would be a lot more informative if you included the 
complete references.

--- Seema Bhatia wrote:
> Also, how does one verify that this 'identifying' variable that seperates
> the two equations is valid in the sense that it determines whether that case
> is selected or not but does not determine the LHS in the second step?

--- georg wernicke wrote:
> the unique variable the selection process should contain is probably a
> dummy which is used as the selection identifier. lets say you data for
> workers, some work some are unemployed. then create a dummy whether
> the worker has work or not and use this in the selection equation as
> the identifier.

The identifying variables mean something different here: these are the 
variables that influence the probability of being selected but not the 
outcome of equation of interest; this assumption make sure that the 
model is identified. It is not a variable that identifies which 
observation is selected and which is not. The latter variable is 
unnecessary when using -heckman- (the observations with a missing value
on the dependent variable are not selected, all others are.)

To answer Seema's original question: These types of models try to control 
for things you have not observed. As a result you do not have all the 
necessary information available in your dataset. The information you are 
missing comes from assumptions/theory, in this case the assumption that 
the identifying variable only influences the probability. If you could 
empirically verify that your identifying variable was good, you would not 
need -heckman-. This leads to a catch-22 situation: you either have to 
use heckman, but than you can't verify the identifying variable; or you 
can verify the identifying variable, but than you should not use -heckman-. 
So if you have to use -heckman-, an important part of the information 
contained in the parameter estimates do not come from your data, but from 
your theory. As a consequence I see -heckman- as primarily a theoretical 
exercise with a limited amount of empirical content, instead of an 
empirical estimate. 

hope it helps,

Maarten

-----------------------------------------
Maarten L. Buis
Department of Social Research Methodology 
Vrije Universiteit Amsterdam 
Boelelaan 1081 
1081 HV Amsterdam 
The Netherlands

visiting address:
Buitenveldertselaan 3 (Metropolitan), room Z434 

+31 20 5986715

http://home.fsw.vu.nl/m.buis/
-----------------------------------------


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