st: Heckman panel with individual effects possible?
Date
Tue, 19 Oct 2004 17:26:05 +0200
In case my question did not go through in the first attemp, I hereby try again:
Hi!
I got a panel data set of some small scale farmers in developing countries.
Some sell volume X at individual price P, some don't sell at all. The
control variables vector Z for all farmers available.
Heckmans method controls for self selection by (i) estimating a probit for
sell / no sell (ii) introducing the resulting Mills ratio in the sales
equation before running a normal OLS (on the households that do sell their
product).
I got information from two years, so I wonder whether there exist some kind
of Stata procedure to correct by estimating individual effects (either
fixed or random).
The Stata command "xtprobit" does exactly this for a isolated first step, so
(1) How do I introduce xtprobit in the first stage of the Heckman in order
to correct for individual (unobserved) differences in choosing to sell or not?
(2) How do I introduce individual differences the sales function (second
step) of the Heckman model (i.e. also individual unobserved differences in
sales volume for the farmers who do sell)?
Anyone out there who knows how to solve this? I would most appreciate your
help!
Henrik Wiig
Department of Economics
University of Oslo
PO Box 1095 Blindern, N-0317 Oslo, Norway
Eilert Sundts hus, 12th floor, Moltke Moes vei 31
Telephone: 22 85 51 35
Fax: 22 85 50 35
E-mail: [email protected]
Private telephone: 22 55 24 84
Mobile telephone: 47 75 75 09 http://folk.uio.no/hwiig/
