I doubt the large number of zeros is the ulitimate cause of your error
message. There is probably something odd about your data. Can you
run a pooled model with -tobit- instead of -xttobit-? You may also
want to consider -poisson- and others in that family.
On Mon, Apr 14, 2008 at 2:24 PM, sarah young
<[email protected]> wrote:
> Nick,
>
> Thanks so much for your reply again. you are right that 2/3 firms do
> not export anything in my data, i.e. their export intensity is zero.
> export intensity is measued as the ratio of exports and total sales.
> Many existing literature on determinants of export intensity use
> Tobit, I understand a reason is that they treat export intensity as a
> censored variable. I read somewhere that for a variable like this,
> i.e. with over half of the observation as zero, Tobit model is more
> appropriate than xtreg or xtabond2. Is that right? Thanks a lot.
>
> Sarah
>
>
>
> On Mon, Apr 14, 2008 at 6:48 PM, Nick Cox <[email protected]> wrote:
> > My point had I think nothing to do with censoring, but with the geometry
> > of what you are
> > asking Stata to do.
> >
> > Please appreciate that I don't know anything about your data, nor
> > I am an economist.
> >
> > If I see that 2/3 of firms have zero "export intensity", then unless
> > intensity
> > has some special meaning, I infer from that that 2/3 firms do not export
> > anything -- at least
> > in the data period.
> >
> > sarah young
> >
> >
> > Thanks for the response. I am just starting to learn econometrics. I
> > thought that for a variable with over half of the observations are
> > zero, like export intensity in my model, the variable could be treated
> > as a censored variable. Or probably I am wrong?
> >
> > I have used xtreg and xtabond2 to estimate the model and they performed
> > well.
> >
> >
> >
> > On Mon, Apr 14, 2008 at 5:31 PM, Nick Cox <[email protected]> wrote:
> > > Consider a standard regression of your response (call it y) on any two
> > > predictors.
> > > Then a simplified analogue of your problem is that two-thirds of your
> > > data lie on
> > > the plane y = 0 and the other third lies on one side of that plane.
> > > Geometrically that sounds
> > > a pretty awkward situation to model. Having more predictors and using
> > > tobit don't I think
> > > make it any easier.
> > >
> > > There is no positive suggestion embedded here, just a thought that the
> > > message doesn't sound that
> > > surprising in such a light.
> > >
> > > Nick
> > > [email protected]
> > >
> > > sarah young
> > >
> > > I have been trying to run xttobit without success. The problem is
> > > "initial value not feasible".
> > >
> > > I have a panel of more than 4000 firms for 15 years, which altoghther
> > > is about 62,000 firm-year observations. The dependent variable is
> > > export intensity, two thirds of which are zeros. So I chose to use
> > > Tobit model. The model is on the determinants of export intensity,
> > > theoretically the choosing of the independent variables is fine, which
> > > include TFP, age, size, R&D intensity etc, as well as year and
> > > industry dummies. I have tried by using different sets of independent
> > > variables, for example, including only one variable on the right side,
> > > excluding year and industry dummies, all of these not working and the
> > > message was the same, "initial value not feasible."
> > >
> > > I have searched on Statalist archive and found this thread:
> > > http://www.stata.com/statalist/archive/2007-05/msg01036.html
> > >
> > > I tried to solve the problem according to the suggestions in the
> > > thread but still it is not working. Could anyone give some advice?
> > > What are the possible problems behind this? How to solve them?
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