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Re: st: tobit probit censored data confusion

From   Maarten buis <>
Subject   Re: st: tobit probit censored data confusion
Date   Wed, 3 Oct 2007 08:14:34 +0100 (BST)

--- "F. Gao" <> wrote:
> I have a question regarding statistical models. I have a panel data
> with obs on people's background information (age, wealth from other
> sources, etc), and wage if the person decides to work. A person may
> choose to work, if so, there is an observable wage; if not, wage is
> 0.
> I am confused about what models to use. It looks like a standard
> tobit model, with wage censored at 0. Below is an alternative way to
> model.
> A: Probit model of the decision to work or not.
> B: For wage>0 observations, use OLS regression.
> I have seen both in practice. But while using two models, the authors
> mention that they are estimating both model A and model B at the same
> time. What does it mean "at the same time"?

They are probably doing more than just estimate model A and B, see:
-help heckman-
> Bottom line:
> If both tobit and the joint estimation of models A and B are
> appropriate, which is better?

That's a tough question. A short readable text is: Breen, 
Richard (1996), "Regression Models: Censored, Sample-selected, or
Truncated Data". Thousand Oaks: Sage.

Hope this helps,

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

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