Bookmark and Share

Notice: On April 23, 2014, Statalist moved from an email list to a forum, based at

[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]

Re: st: Understanding how to use biprobit to control for endogenous dummy

From   Austin Nichols <[email protected]>
To   [email protected]
Subject   Re: st: Understanding how to use biprobit to control for endogenous dummy
Date   Fri, 30 Mar 2012 09:51:10 -0400

Kevin Infante <[email protected]>:
and always estimate the linear model too,
with e.g. -ivreg2- on SSC,
to get a sense of instrument strength etc.
The linear model is much easier to interpret, most of the time.

On Fri, Mar 30, 2012 at 12:13 AM, Kevin Infante <[email protected]> wrote:
> Hello statalist,
> I'm an undergraduate senior Economics major. I have a basic
> understanding of econometrics
> and a basic understanding of Stata. Unfortunately, the models I
> apparently need to run demand a more in-depth understanding of both.
> Here is one of my regressions:
> y1=a*y2+b*w+u1   (1)
> y2=c*z+d*w+u2     (2)
> y1=dummy representing whether a respondent voted
> y2= endogenous dummy representing whether a respondent lists Internet news as
> their main news source
> w=collection of demographic controls, as well as dummies for the year
> and state of residence of the respondent
> z= a collection of instrument variables
> u1=error term of equation (1)
> u2= error term of equation (2)
>  From all I have read on this list, -biprobit- is the stata command
> that is best suited to deal with an endogenous dummy variable in a
> discrete choice model.
>  I've run my models using biprobit, and successfully gotten output.
> The first problem I have is I don't know how to interpret the output.
> I gather that rho is important, but I don't know what rho is or what
> it measures. The coefficient on rho is -.55, and the SE is .055. I'm
> assuming the likelihood-ratio test of rho=0 is also important, which
> indicates p>chi2=0.0000. I again have no idea what that means. Lastly,
> I'm not sure what coefficients on the variables I should be looking
> at.
> From reading different message threads from the archives, I gather I
> may need to impose additional restrictions, specifically a coherency
> restriction and an exclusions restrictions. Unfortunately, I again
> have no idea what those are. I have checked out both Greene(2003) and
> Maddala(1983), and read the sections that relate to this analysis,
> butI understand very little of it, as the econometrics is much more
> advanced than what I've been exposed to.
> If anyone could help explain to me relatively simply how to interpret
> the biprobit output, whether I need additional restrictions and why,
> and just some of the basic theory behind what I am trying to do, I
> would much appreciate it. Also if anyone has any references or sources
> that would help me learn about what I'm doing, that would be very
> useful. My faculty adviser and the resident Stata expert were both not
> able to help me much as both were unfamiliar with the theory and stata
> command. Thank you for all your help!
> Best,
> Kevin Infante

*   For searches and help try:

© Copyright 1996–2018 StataCorp LLC   |   Terms of use   |   Privacy   |   Contact us   |   Site index