# [Limdep Nlogit List] Need a kind help

Abdulbaki Bilgic tebrik at yahoo.com
Fri Apr 7 02:27:51 EST 2006

```  Dear Limdep Users,
I am estimating a bivariate tobit model with three switching regimes: (y1>0, y2=0), (y1=0,y2>0), and (y1>0, y2>0). The last term where both y1 and y2 greater than 0 is the conditional distribution of y2 given y1 >0. I have written a code in Limdep and got a error reporting a zero division and i have checked the reference book it says a dependent variable problem and when deleting the first observation, it gives the same problem too. Any ideas please.

CREATE ; IF(Y1 = 0 & Y2 =0)DUMMY1=1
; (ELSE) DUMMY1=0
; IF(Y1 > 0 & Y2 =0)DUMMY2=1
; (ELSE) DUMMY2=0
; IF(Y1 = 0 & Y2 >0)DUMMY3=1
; (ELSE) DUMMY3=0
; IF(Y1 > 0 & Y2 >0)DUMMY4=1
; (ELSE) DUMMY4=0 \$
NAMELIST ; X1 =ONE
; X2 =ONE \$
CALC ; LIST
; KA=COL(X1)
; KB=COL(X2)
; KC=KA+1
; KD=KA+KB \$
MATRIX ; LIST
; CA=INIT(KA,1,.0)
; CB=INIT(KB,1,.0) \$
MAXIMIZE ; START =CA,CB,.0,.0,.0
; LABELS=KA_BA, KB_BB,SIGM1,SIGM2,RHO12
; FCN=TA1 =LOG((1+RHO12)/(1-RHO12)) |
RHO12 =(EXP(TA1)-1)/(EXP(TA1)+1) |
SG1 =1/(SIGM1*(SQR(1-RHO12^2))) |
SG2 =1/(SIGM2*(SQR(1-RHO12^2))) |
SG3 =1/(SIGM2^2*(SQR(1-RHO12^2))) |
ETA1 =1/(2*SIGM1^2) |
ETA2 =1/(2*SIGM2^2) |
ETRHO1 =RHO12*(SIGM1/SIGM2) |
ETRHO2 =RHO12*(SIGM2/SIGM1) |
RHOSQ =(1-RHO12^2) |
INDEX1 =BA1'X1 |
INDEX2 =BB1'X2 |
ERROR1 =Y1-INDEX1 |
ERROR2 =Y2-INDEX2 |
INDX1 =INDEX1+ETRHO1*ERROR2 |
INDX2 =INDEX2+ETRHO2*ERROR1 |
INDXX1 =-SG1*INDX1 |
INDXX2 =-SG2*INDX2 |
DUMMY2*(-0.5*LOG(2*PI)-LOG(SIGM1)-ETA1*ERROR1^2+LOG(PHI(INDXX2)))+
DUMMY3*(-0.5*LOG(2*PI)-LOG(SIGM2)-ETA2*ERROR2^2+LOG(PHI(INDXX1)))+
DUMMY4*(-0.5*LOG(2*PI)-LOG(SIGM1)-ETA1*ERROR1^2-2*LOG(SIGM2)
-0.5*LOG(RHOSQ)-SG3*(Y2-INDX2)^2)
; ALG=N
; TLF=1.D-8
; TLG=1.D-4
; SET \$

Output is:
Error 590: Obs.= 1 Cannot compute function: Zero_dvd
Warning 137: Iterations: function not computable at crnt. trial estimate
Error 802: Cannot compute function at start values. Exit status=4.
Function= .36023626764D+05, at entry, .00000000000D+00 at exit
+---------------------------------------------+
| User Defined Optimization |
| Maximum Likelihood Estimates |
| Model estimated: Apr 06, 1999 at 04:18:24PM.|
| Dependent variable Function |
| Weighting variable None |
| Number of observations 22344 |
| Iterations completed 0 |
| Log likelihood function .0000000 |
| Number of parameters 0 |
| Info. Criterion: AIC = .00000 |
| Finite Sample: AIC = .00000 |
| Info. Criterion: BIC = .00000 |
| Info. Criterion:HQIC = .00000 |
+---------------------------------------------+
+---------+--------------+----------------+--------+---------+
|Variable | Coefficient | Standard Error |b/St.Er.|P[|Z|>z] |
+---------+--------------+----------------+--------+---------+
BA1   .000000 1.00000000 .000 1.0000
BB1   .000000 1.00000000 .000 1.0000
SIGM1 .000000 1.00000000 .000 1.0000
SIGM2 .000000 1.00000000 .000 1.0000
RHO12 .000000 1.00000000 .000 1.0000

Best regards,

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