# st: RE: RE�: st: solving for unobserved hetereogeneity with two simultaneous equations

 From "Sammy.Oyombe" <[email protected]> To [email protected] Subject st: RE: RE�: st: solving for unobserved hetereogeneity with two simultaneous equations Date Mon, 24 Sep 2007 14:53:00 +0300

```Dear David,

I am sure that you will be pleased to read from your old friend in the name
of Sammy Oyombe. How are you doing at that end of the world?

I left the civil service early this year and are now in UNDP.

I am impressed to note that you have continued to use stata for data
analysis. I came across your name in your query and felt I should
communicate with you.

I wish you all the best.

Sammy Oyombe.

_____

From: [email protected]
[mailto:[email protected]] On Behalf Of Ojakaa David
Sent: Friday, September 21, 2007 9:11 PM
To: [email protected]
Subject: st: RE : st: solving for unobserved hetereogeneity with two
simultaneous equations

Hi,

Thank you for the hints, but my problem is neither a question of ivreg nor
one of bi-probit, and let me explain it more clearly:

1. I have longitudinal data ( an individual survey in which the date of
birth for each child is recorded) and a community counterpart for which the
year when each health facility offering family planning services surveyed
was opened. For each woman, dates of birth are observed (noted) for each
year since 1967 when expansion of health facilities began, including 1984
when the population policy was introduced, ending in 1998 when the survey
was conducted. I merge the two datasets to obtain a panel as indicated
above.

2. My problem is to estimate the effects (impact) of various factors (such
as whether the health facility providing FP services lives within 5 kms of
the community, as well as the introduction of the 1984 population policy) on
fertility (whether a woman had a birth during each year of observation).

3. I therefore set up the following two equations to handle unobserved
heterogeneity (fixed effects and random effects) at the level of the
community and at the individual level:

Equation 1 (Binary logit): P(having an annual birth)= effects of individual
factors + effects of community factors (e.g. clinic is located within 5 Kms
of the community)+ effect of introduction of 1984 population policy (which
is the interaction of year dummy and whether FP facility was open at that
time) + .....

Equation 2: (Binary logit): P(FP clinic is located within 5 Kms of the
community)= effects of community characteristics + ........

4. Since the two dependent variables are non-linear, I think that I should
not use the instrumental variables technique which is for continuous
dependent variables.

5. In the final analysis, I think that it is a question of solving
(integrating out the random unobserved factors) the two equations with (full
information?) maximum likelihood.

How to do it in stata?

_____

De: [email protected] de la part de Partha Deb
Date: jeu. 2007-09-20 23:55
�: [email protected]
Objet : Re: st: solving for unobserved hetereogeneity with two simultaneous
equations

David,

I'm assuming that "FP clinic is located within 5 Kms of the community" is in
equation 1, i.e., that is your endogenous treatment.  If so, you have 2
choices that capture the spirit of what you want to do

1. Estimate a bivariate probit (-biprobit-).  The advantage is that the
model
that it makes a parametric assumption about the distribution (which, of
course, you did with the logit).

2. Estimate a linear simultaneous equations system (-ivregress-, -ivreg2-).
It is not designed explicitly for binary variables, but is less parametric
and
is not inappropriate.

If you aren't thinking about endogeneity, you can use -biprobit- or -sur-.

Good luck.

Partha

Ojakaa David wrote:
> I have two equations that try to control for unobserved heterogeneity.
>
> Equation 1 (Binary logit): P(having an annual birth)= effects of
individual factors + effects of community factors (for example access to FP
clinics)+.....
>
> Equation 2: (Binary logit): P(FP clinic is located within 5 Kms of the
community)= effects of community characteristics + ........
>
> What is the stata code that I should use to solve for the two equations
simultaneously?
>
> *
> *   For searches and help try:
"http://www.stata.com/support/faqs/res/findit.html"http://www.stata.com/supp
ort/faqs/res/findit.html
"http://www.stata.com/support/statalist/faq"http://www.stata.com/support/sta
talist/faq
"http://www.ats.ucla.edu/stat/stata/"http://www.ats.ucla.edu/stat/stata/

--
Partha Deb
Department of Economics
Hunter College
ph:  (212) 772-5435
fax: (212) 772-5398
"http://urban.hunter.cuny.edu/~deb/"http://urban.hunter.cuny.edu/~deb/

Emancipate yourselves from mental slavery
None but ourselves can free our minds.
- Bob Marley

*
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talist/faq
"http://www.ats.ucla.edu/stat/stata/"http://www.ats.ucla.edu/stat/stata/

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