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st: Why does STATA drop observations with MLE (logit/probit)?

From   Benjamin Highton <[email protected]>
To   <[email protected]>
Subject   st: Why does STATA drop observations with MLE (logit/probit)?
Date   Mon, 15 Jul 2002 13:53:48 -0700 (PDT)

Hi all,

I have a binary outcome variable (y) that I am modeling as a function of
two independent variables (x1 and x2).  x2 is also binary (0/1).  The
question I have relates to the fact that for all observations where the
value of x2=1, the value of y=1.  (When x2=0, y=0 for some observations
and y=1 for others).  When I attempt to estimate a logit model (logit y x1 x2),
STATA drops the observations where x2=1 and estimates the model for the
other observations.  Specifically, the output says the following:
     note: x2~=0 predicts success perfectly
           x2 dropped and 36 obs not used
The same thing happens with a probit model (probit y x1 x2).  If willing
to violate assumptions, I can use OLS (regress y x1 x2) and keep all the
observations.  Can someone explain to me why STATA drops the observations
when I use logit or probit?  Thanks, in advance.  --Ben

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