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st: Dependent variable in a tobit model

From   Estrella Gomez <>
Subject   st: Dependent variable in a tobit model
Date   Mon, 15 Nov 2010 11:19:24 +0100

Dear Statalist:

I am estimating a gravity equation of exports and I have decided to
use tobit model, since the number of zeros in the dataset is high.
This model is usually estimated in its loglinear version. However, if
I use the logarithm of trade as dependent variable, the zeros are
dropped (since the logarithm of zero is unfeasible).

This is the command I have introduced in Stata 11:

xttobit lxi lGDP_i lGDP_j contig comla smctry ldist RTAboth i.exporter
i.importer i.year, ll(0)

where "lxi" is the logarithm of exports and the independent variables
are the standard variables in a gravity equation

Of course, the number of censored observations is zero, since the
dependent variable is introduced in logs. I think this is not correct,
but I have seen this specification in most of the gravity-related

Could somebody help me with this?

In addition, I do not know if it is correct to introduce exporter,
importer and time effects in the model

Thank you in advance,
Estrella Gómez

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