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Re: st: solving for unobserved hetereogeneity with two simultaneousequations


From   Partha Deb <partha.deb@hunter.cuny.edu>
To   statalist@hsphsun2.harvard.edu
Subject   Re: st: solving for unobserved hetereogeneity with two simultaneousequations
Date   Thu, 20 Sep 2007 23:55:11 -0400

David,

I'm assuming that "FP clinic is located within 5 Kms of the community" is in equation 1, i.e., that is your endogenous treatment. If so, you have 2 choices that capture the spirit of what you want to do

1. Estimate a bivariate probit (-biprobit-). The advantage is that the model respects the binary nature of your dependent variables. The disadvantage is that it makes a parametric assumption about the distribution (which, of course, you did with the logit).

2. Estimate a linear simultaneous equations system (-ivregress-, -ivreg2-). It is not designed explicitly for binary variables, but is less parametric and is not inappropriate.

If you aren't thinking about endogeneity, you can use -biprobit- or -sur-.

Good luck.

Partha


Ojakaa David wrote:

I have two equations that try to control for unobserved heterogeneity.

Equation 1 (Binary logit): P(having an annual birth)= effects of individual factors + effects of community factors (for example access to FP clinics)+.....
Equation 2: (Binary logit): P(FP clinic is located within 5 Kms of the community)= effects of community characteristics + ........
What is the stata code that I should use to solve for the two equations simultaneously?

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Partha Deb
Department of Economics
Hunter College
ph:  (212) 772-5435
fax: (212) 772-5398
http://urban.hunter.cuny.edu/~deb/

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