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st: exclusion restriction


From   pcma@iseg.utl.pt
To   statalist@hsphsun2.harvard.edu
Subject   st: exclusion restriction
Date   Sat, 10 Apr 2010 16:34:49 +0200

Dear Statalist,



I have estimated a bivariate probit using stata biprobit in order to analyse
the effect of care by a grandparent (GP) on the mother's probability to
work. However, I have not included in the GP equation a variable that is
related to GP care but uncorrelated with the error term in the outcome
equation, as would be advisable. I do not have many variables to choose from
and the only one that seems to come close is the fact that the father of the
mother (a grandfather, who is not necessarily the carer) is alive.

My doubts are:

I)                    If this variable  is  related to GP care but
uncorrelated with the error term in the outcome equation, do I have to
explain the logic of the relation, or is it sufficient that there is a
relation?

2)           What tests should I make to assess whether it is a good choice?
The tests that I've seen suggested are obtainable after IVreg, not after
biprobit, I think.



I am using Stata version 9.2.



I would be grateful for any help.



Paula


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