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Re: st: RE: xttobit initial value not feasible


From   "Austin Nichols" <austinnichols@gmail.com>
To   statalist@hsphsun2.harvard.edu
Subject   Re: st: RE: xttobit initial value not feasible
Date   Mon, 14 Apr 2008 14:45:41 -0400

I doubt the large number of zeros is the ulitimate cause of your error
message.  There is probably something odd about your data.  Can you
run a pooled model with -tobit- instead of -xttobit-?  You may also
want to consider -poisson- and others in that family.

On Mon, Apr 14, 2008 at 2:24 PM, sarah young
<sarahyoungnew@googlemail.com> wrote:
> Nick,
>
>  Thanks so much for your reply again. you are right that 2/3 firms do
>  not export anything in my data, i.e. their export intensity is zero.
>  export intensity is measued as the ratio of exports and total sales.
>  Many existing literature on determinants of export intensity use
>  Tobit, I understand a reason is that they treat export intensity as a
>  censored variable. I read somewhere that for a variable like this,
>  i.e. with over half of the observation as zero, Tobit model is more
>  appropriate than xtreg or xtabond2. Is that right? Thanks a lot.
>
>  Sarah
>
>
>
>  On Mon, Apr 14, 2008 at 6:48 PM, Nick Cox <n.j.cox@durham.ac.uk> wrote:
>  > My point had I think nothing to do with censoring, but with the geometry
>  > of what you are
>  > asking Stata to do.
>  >
>  > Please appreciate that I don't know anything about your data, nor
>  > I am an economist.
>  >
>  > If I see that 2/3 of firms have zero "export intensity", then unless
>  > intensity
>  > has some special meaning, I infer from that that 2/3 firms do not export
>  > anything -- at least
>  > in the data period.
>  >
>  > sarah young
>  >
>  >
>  > Thanks for the response. I am just starting to learn econometrics. I
>  > thought that for a variable with over half of the observations are
>  > zero, like export intensity in my model, the variable could be treated
>  > as a censored variable. Or probably I am wrong?
>  >
>  > I have used xtreg and xtabond2 to estimate the model and they performed
>  > well.
>  >
>  >
>  >
>  > On Mon, Apr 14, 2008 at 5:31 PM, Nick Cox <n.j.cox@durham.ac.uk> wrote:
>  > > Consider a standard regression of your response (call it y) on any two
>  > > predictors.
>  > > Then a simplified analogue of your problem is that two-thirds of your
>  > > data lie on
>  > > the plane y = 0 and the other third lies on one side of that plane.
>  > > Geometrically that sounds
>  > > a pretty awkward situation to model. Having more predictors and using
>  > > tobit don't I think
>  > > make it any easier.
>  > >
>  > > There is no positive suggestion embedded here, just a thought that the
>  > > message doesn't sound that
>  > > surprising in such a light.
>  > >
>  > > Nick
>  > > n.j.cox@durham.ac.uk
>  > >
>  > > sarah young
>  > >
>  > > I have been trying to run xttobit without success. The problem is
>  > > "initial value not feasible".
>  > >
>  > > I have a panel of more than 4000 firms for 15 years, which altoghther
>  > > is about 62,000 firm-year observations. The dependent variable is
>  > > export intensity, two thirds of which are zeros. So I chose to use
>  > > Tobit model. The model is on the determinants of export intensity,
>  > > theoretically the choosing of the independent variables is fine, which
>  > > include TFP, age, size, R&D intensity etc, as well as year and
>  > > industry dummies. I have tried by using different sets of independent
>  > > variables, for example, including only one variable on the right side,
>  > > excluding year and industry dummies, all of these not working and the
>  > > message was the same, "initial value not feasible."
>  > >
>  > > I have searched on Statalist archive and found this thread:
>  > > http://www.stata.com/statalist/archive/2007-05/msg01036.html
>  > >
>  > > I tried to solve the problem according to the suggestions in the
>  > > thread but still it is not working. Could anyone give some advice?
>  > > What are the possible problems behind this? How to solve them?
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