[Limdep Nlogit List] Question about bivariate probit

William Greene wgreene at stern.nyu.edu
Fri Jul 21 06:35:59 AEST 2017

Jane.  (1)  RHO is not the correlation of z1 and z2.  It is the correlation
of the disturbances.
Your manual tells you how to compute a tetrachoric correlation.  You should
use that.
(2) Your WALD command is incorrect.  The function you want to analyze is
RHO over the
square root of the variance.  Your use of the ^ in the function asks the
program to raise rho
to the power 1/var(rho).  You should just trust the probit output,  It is
giving you the right test
statistic, although, you are not interpreting RHO correctly.
/Bill Greene

On Thu, Jul 20, 2017 at 10:51 AM, Jane Kolodinsky <Jane.Kolodinsky at uvm.edu>

> I am trying to determine whether an individual's opposition to genetic
> engineering is jointly determined with seeing a label that says "produced
> using GE."
> I ran the wald test to "automate" the test and they are contradictory.
> RHO(1,2)|    -.01910         .06371     -.30  .7644     -.14396    .10577
> Above is the relevant output from the bivariate probit:  bivariateprobit;
>  Lhs=z1, z2;    Rh1=x1; rh2= x2$
> The prob value is .76---do not reject rho>0.
> I also calculated the wald test following p. E21-9 in the Limdep manual.
> calc;list; waldtest=rho^/varrho; pvalue=1-chi(waldtest,1)$
> That output is:
> CALC] WALDTEST=      246.3811130
> [CALC] PVALUE  =         .0000000
> Calculator: Computed   2 scalar results
> The output is telling me not to reject  they null hypothesis that rho =0
> and the Wald test is telling me to reject the null hypothesis.
> Please advise.
> _______________________________________________
> Limdep site list
> Limdep at limdep.itls.usyd.edu.au
> http://limdep.itls.usyd.edu.au

William Greene
Department of Economics
Stern School of Business, New York University
44 West 4 St., 7-90
New York, NY, 10012
URL: http://people.stern.nyu.edu/wgreene
Email: wgreene at stern.nyu.edu
Ph. +1.212.998.0876
Editor in Chief: Journal of Productivity Analysis
Editor in Chief: Foundations and Trends in Econometrics
Associate Editor: Economics Letters
Associate Editor: Journal of Business and Economic Statistics
Associate Editor: Journal of Choice Modeling

More information about the Limdep mailing list