To my question below, Mathew Stalker replied:
The prediction of Y from your model would simply be the exponential of the
predicted logY.
---
My reply: Well, according to Wooldridge, in his book Basic Econometrics
(2000:202), this does not work, since the value of Y will be systematically
underestimated by simply taking the exponential of logY.
---
However, you should note that the log of zero is minus infinity, so in your
log model no observations where Y is zero will be included. Is this really
what you want?
---
My reply: I solved this by setting 0 expenditures to 1 befor the log
transformatiom (as I wrote in the mail).
---
Christer
[email protected]
m To: [email protected]
Sent by: cc:
owner-statalist@hsphsun2. Subject: Re: st: logY, Tobit and the prediction of Y
harvard.edu
23.04.03 15:02
Please respond to
statalist
[email protected] wrote on 23/04/2003 13:18:03:
> Hi,
>
> My initial model is:
>
> Y = a + b1x1 + controls + e
>
> where Y is expenditures on a commodity and x1 is income.
>
> Since there are a lot of zeroes, I use the Tobit apporach. However, since
> the log-linear model performed better than the linear, I use the former
> (Before the log transformation of Y, I follow convention and set zeroes
to
> 1.)
>
> Accordingly, the estimated Tobit model is:
>
> logY = a + b1x1 + controls + e
>
> The problem:
>
> I want to predict the value of Y (not logY) for certain values of income
> (and put it in a graph); that is, both the conditional Y (i.e. the Y
given
> that the threshold value of 0 was passed) and the unconditional (latent)
> value of Y.
>
> Does anyone know how to do this?
>
> Best regards,
>
> Christer Thrane
> Lillehammer University College
> Norway
>
>
>
>
>
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