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Re: st: Dependent variable in a tobit model

From   Austin Nichols <[email protected]>
To   [email protected]
Subject   Re: st: Dependent variable in a tobit model
Date   Mon, 15 Nov 2010 11:31:23 -0500

Estrella Gomez <[email protected]> :
Why not use -poisson- or -glm- with cluster-robust standard errors
(and fixed effects if you like)?  Cameron and Trivedi would have you
"trick" Stata's -tobit- command using a negative y in place of
ln(zero), but I argue in
that tricking Stata this way is a bad idea; see also
Santos Silva and Tenreyro. 2006. "The Log of Gravity." Review of
Economics and Statistics, 88(4): 641-658.
Cameron and Trivedi. 2009. Microeconometrics Using Stata. Stata Press,
College Station TX.

Note that a lot of zeros is not a problem in general, since those
observations may also have very low predicted values conditional on

On Mon, Nov 15, 2010 at 5:19 AM, Estrella Gomez <[email protected]> wrote:
> 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
> articles
> 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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