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Re: st: Warning convergence not achieved


From   William Buchanan <[email protected]>
To   [email protected]
Subject   Re: st: Warning convergence not achieved
Date   Sun, 5 Aug 2012 09:02:49 -0700

Hi Ebru,

Have you checked the cell sizes for your dummy variables?  If you have one or two dummy variables that make up a small percentage of your sample size you may want to collapse them into a single category.  This type of issue happens often and Maarten Buis has given this advice to numerous folks on the Statalist who are having difficulties with model  convergence.

HTH,
Billy



On Aug 5, 2012, at 8:12 AM, Ebru Ozturk wrote:

> Dear Joao,
> 
> Thank you. Actually, when I run the Tobit estimation it works very well. But when I add industry dummies (9 industries) into the model it gives the warning. How can I deal with that?
> 
> Kind regards
> Ebru
> 
> 
> ----------------------------------------
>> From: [email protected]
>> To: [email protected]
>> Date: Sun, 5 Aug 2012 15:42:50 +0100
>> Subject: RE: st: Warning convergence not achieved
>> 
>> Dear Ebru,
>> 
>> The reason may simply be that the Tobit ML estimates do not exist for your
>> data set. This will happen, for example, if one of your regressors is a dummy
>> that is equal to one only when y is equal to zero. The problem, in a different but
>> related context is discussed here:
>> http://www.sciencedirect.com/science/article/pii/S0165176510000832
>> http://www.stata-journal.com/article.html?article=st0225
>> 
>> A simple way to check for this is to run a probit instead of a Tobit, with the same
>> y and the same regressors, and see if you have a "perfect predictor".
>> 
>> Hope this helps,
>> 
>> Joao
>> 
>> 
>>> Dear All,
>>> 
>>> When I run the tobit estimation, sometimes it gives this warning "convergence
>>> not achieved". What could be the reasons? and how can I deal with that?
>>> 
>>> Best wishes
>>> Ebru
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