# RE: st: RE: xttobit initial value not feasible

 From "Nick Cox" <[email protected]> To <[email protected]> Subject RE: st: RE: xttobit initial value not feasible Date Mon, 14 Apr 2008 18:48:51 +0100

```My point had I think nothing to do with censoring, but with the geometry
of what you are

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 <[email protected]> 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
> [email protected]
>
> 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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