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Re: st: Estimated regressors and GMM


From   Stas Kolenikov <[email protected]>
To   [email protected]
Subject   Re: st: Estimated regressors and GMM
Date   Sun, 23 Oct 2011 09:21:48 -0500

On Sun, Oct 23, 2011 at 9:06 AM, Tsatsaronis, Konstantinos
<[email protected]> wrote:
> I am having trouble in estimating by stacked GMM a model with generated regressors. I checked through past postings and FAQs but I was not too successful. I was wondering if anyone could offer a helpful tip.
>
> Here is one of my attempts to set it up:
>
> gmm (eq1: x - {b0} - {xb:Z1 Z2}) (eq2: y - {c0} - {c2}*(x - {b0} - {yb:Z1 Z2}) - {cw:W1 W2 W3}), inst(Z1 Z2)
>
>
> STATA complains variously about the weighting matrix not being positive definite, about the instrument list etc.

You posted the syntax, which is a good step towards solving the
problem. Post your error messages, as well. With two instruments and
two equations, you have only 4 d.f. in your estimation space, but it
seems like you want to estimate 7 or 8 parameters. No wonder Stata is
lost. Can you use W1 W2 W3 as instruments as well?

-- 
Stas Kolenikov, also found at http://stas.kolenikov.name
Small print: I use this email account for mailing lists only.
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