st: Interpreting an endogenous switching regime model

[Bo MacInnis <bo@macinnis.org>]

Hi,

I have a really basic question that I am embarrassed to ask. But I am 
rather embarrassed than wrong.

I am estimating an endogenous switching regime model. Instead of stating my 
esoteric research subject, I use the effect of union status on wage as an 
example.

To allow both the intercept term and beta coefficients to differ between 
the union and non-union, I use Heckman selection correction (along with an 
instrument for union status) and estimate the outcome equation for the 
union and non-union separately. The Chow test indicates that the betas do 
differ significantly between the union and non-union in addition to the 
intercept term. I then conclude that the endogenous switching regime model 
is appropriate and that the model using -treatreg- that assumes only the 
intercept term differs is not appropriate.

Under the endogenous switching regime model, I need to answer two questions:
(1) what is the overall effect of union on wage?
---> Is it the difference between the predicted value of wage (including 
the intercept term) for the union workers and the predicted value of wage 
for the non-union workers?

(2) what is the effect of union on "return" to region of residence? region 
of residence is one of the regressors in the outcome equation assumed to be 
exogenous (I am sorry if the example sounds too contrived).
--> Is it the difference between the beta coefficient of region of 
residence for the union workers and the beta coefficient of region of 
residence for the non-union workers?

Thank you for your help!
Bo MacInnis

*
*   For searches and help try:
*   http://www.stata.com/support/faqs/res/findit.html
*   http://www.stata.com/support/statalist/faq
*   http://www.ats.ucla.edu/stat/stata/