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st: Request for help re: my treatment and selection models

From   "Shehzad Ali" <>
To   <>
Subject   st: Request for help re: my treatment and selection models
Date   Sun, 11 Nov 2007 18:55:48 -0000

Hello listers,

I have a query about using biprobit, treatreg and heckman steps in stata
and generating IMRs. I am using a three-part model for medical expenditure.
Here is a summary:

I have 2,000 individuals of which 1,500 felt sick, of which 1,000 sought
medical advice and hence had medical expenditure. I am concerned only with
the sick individuals in my study. Here the first selection bias is with
regards to seeking treatment when ill. Then in the sample, 700 individuals
are insured and 1,300 are not. This is the second selection bias which is
related to insurance purchasing decision. Now I am trying to run
expenditure regression (outcome) for the sick individuals only. So I need
to take into account two selection equations, i.e. sought medical advice
when ill, and bought insurance. I have to bear in mind that insurance
decision also affects decision to seeking care when ill and medical
expenditure when treatment is sought.

Here is what I am thinking of doing:

First part of the model:

biprobit (eq1: visit_when_ill = insurance x1 x2 x3) (eq 2: insurance=x1 x2
x3 x4)

Here first eq is for decision to seek care when ill and second decision is
to buy insurance.

Predict imr1, xb

Second part:

heckman med_expenditure x1 x2 x3 imr1 insurance, treat(insurance= x1 x2 x3

predict imr2,xb

Third part:

treatreg med_expenditure x1 x2 x3 insurance imr2, treat(insurance=x1 x2 x3

Is this the right approach to take? Any help would be greatly appreciated.

With sincere thanks,


Shehzad I Ali
Department of Social Policy & Social Work
University of York
YO10 5NG

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