Which raises then the issue... why adding "+1" to y?... just to be
able to take logs?
then why not adding 3/4 or 1/2 or 1/4 for that matter?
The problem with this solution is that, by picking an arbitrary number
to add, you alter the curvature on your transformed dependent variable
(y+1) in a pretty ad hoc manner.
A more sensible solution woud be to do the log transformation on y
whenever y>0, and deal with the zeroes (now missing) directly in your
econometric method, be it Hecman SS correction, Tobit, or whatever way
you want to deal with censoring.
Robert Duval
On 12/13/05, Maarten buis <[email protected]> wrote:
> at Tue 12/13/2005 1:59 PM Victoria Levin wrote:
> > My original dependent variable was left-censored at zero, but
> > since I had to take logs, I did a monotonic transformation of
> > the dependent variable (y+1), and then took logs of that
> > [ln(y+1)]. So, my current dependent variable has many zeroes;
> > the rest are positive values.
> >
> > 1) Somehow, when I run the full MLE heckman model:
> >
> > heckman y x1 x2 x3, select (x1 x2 x3)
>
> <snip>
>
> > I get the following error:
> >
> > Dependent variable never censored due to selection:
> > model would simplify to OLS regression
>
> -heckman- assumes that an observation is censored if y has a missing value. You ensured that there
> are no missing values, but by doing so prevented -heckman- from identifying the censored
> observations. So just taking the log of y would be enough in your case.
>
> HTH,
> Maarten
>
> -----------------------------------------
> Maarten L. Buis
> Department of Social Research Methodology
> Vrije Universiteit Amsterdam
> Boelelaan 1081
> 1081 HV Amsterdam
> The Netherlands
>
> visiting adress:
> Buitenveldertselaan 3 (Metropolitan), room Z214
>
> +31 20 5986715
>
> http://home.fsw.vu.nl/m.buis/
> -----------------------------------------
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