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From |
Maarten buis <maartenbuis@yahoo.co.uk> |

To |
statalist@hsphsun2.harvard.edu |

Subject |
Re: st: Stata implementation of difference-in-differences with binary outcomes |

Date |
Fri, 16 Apr 2010 07:57:03 -0700 (PDT) |

--- On Fri, 16/4/10, C Engelbrecht wrote: > But what if the outcome variable is binary? How should I > model the difference of two latent variables, as is the > case in Probit / Logit? The usual DID is based on > differencing Y across these groups, but what should we > do now that we only have a latent Y*? Difference in difference is all about getting at a causal effect, which is usually difined as a difference in averages. This also exists and is meaningful when the dependent variable is binary, that is the risk difference. You can calculate it using a linear probability model, which is just a fancy name of using -regress- on a binary variable (possibly with the -vce(robust)- option. There is often some uneasyness in specifying "the effect" as linear in the probability metric, as that can eventually lead to predictions outside the range [0, 1]. However, if you define the effect interms of odds ratios or probit coefficients, you won't get the causal effects either, see for example: Mood 2010, Allison 1999, or Neuhaus and Jewell 1993. So my guess would be that the linear probability model is in this case the lesser of two evils. Hope this helps, Maarten Allison, Paul D. 1999. "Comparing Logit and Probit Coefficients Across Groups." Sociological Methods & Research 28:186–208. Mood, Carina. 2010. "Logistic regression: Why we cannot do what we think we can do, and what we can do about it." European Sociological Review 26:67–82. Neuhaus, John M. and Nicholas P. Jewell. 1993. "A Geometric Approach to Assess Bias Due to Omited Covariates in Generalized Linear Models." Biometrika 80:807–815. -------------------------- Maarten L. Buis Institut fuer Soziologie Universitaet Tuebingen Wilhelmstrasse 36 72074 Tuebingen Germany http://www.maartenbuis.nl -------------------------- * * For searches and help try: * http://www.stata.com/help.cgi?search * http://www.stata.com/support/statalist/faq * http://www.ats.ucla.edu/stat/stata/

**Follow-Ups**:**Re: st: Stata implementation of difference-in-differences with binary outcomes***From:*Steve Samuels <sjsamuels@gmail.com>

**References**:**st: Stata implementation of difference-in-differences with binary outcomes***From:*C Engelbrecht <cngelbrecht@gmail.com>

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