Dear Stata Users
Household budget survey data for demand system estimation often creates a major problem that is due to recording zero expenditure for food aggregates that are not consumed during the survey period. This cause censored dependent variables and leads to biased results when not accounted for. Heien and Wessells (1990) introduced a computationally simple, two-step estimation procedure based on Heckman’s (1979) work. However, Shonkwiler and Yen (1999) demonstrated the inconsistent two-step estimation procedure. They correct for inconsistency by defining the second-stage regression... defined PDF that can be re-incorporated in the second stage. In doing so the right hand side system of demand equations may not necessary added up to 1 (unlike the usual system of demand equations) and thus the equation must be estimated for full n-vectors (in contrast to n-1 vectors). The usual demand system routine written in STATA, take in to account for n-1 vectors
(including Poi’s, 2008: demand system update). I couldn’t find demand system for full vector... Please share with me if you have STATA routine for full n-vectors or give me some kinds of tip to go head. Any help is appreciated and acknowledged
Cheers
Nigussie
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