[Limdep Nlogit List] Computing the selection variables from the bivariate probit model.

Sami Haile samex_zegr8 at yahoo.com
Sat Nov 15 10:41:50 EST 2008


Dear limde usrs

I want to Compute the selection variables from the bivariate probit model, i.e. the inverse mills ratio, Which i want to use it as instrumental variable in the next step weighted 2step regression. If I follow the normal formula for invers mills, then I will end up with four invers mills ratio based on the four possibilities of the predicted dependent variable, i.e p11 p10 p01 p00. 

How can I calculate invers mills ratio for the two dependent variables y1 y2, which iI can use them in the second two indpendent  weighted 2step regression.In this case My dependent variables are y1=sellers ify1=1 or 0 otherwise; y2=buyers=1, if y2 =1 or 0 otherwise.  In the next step which is weighted 2step regression, i have dependent variable z1= quantity sold and z2= quantity bought.

Thanks for your time.



      




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