Hello Everyone,
Much thanks for the opportunity provided for clarification of doubts and guidance on data analysis.
I am specifying a system of 3 equations using the (reg3 command) for which the two endogenous variables in the system are not continuous. I would like to know if there is a command that can handle this situation. My system of equations appear as follows:
Y1= Y2X2 X3 X4
Y2 = X1+Z1+Z2
X1= V1+V3+V
Y1 (the dependent variable in the final outcome equation) is a continuous dependent variable whereas Y2and X1 are endogenous in the system but non-continuous. The standard reg3 command treats the dependent variables in all the three stages/equations as continuous. It is actually giving me some interesting estimates but I think that is not right since Y2 in equation 2 above is a Limited Dependent Variable (an index bounded between 0 and 1) and X1 in equation 3 is a binary variable (0=No and 1=Yes).
Kindly help me. I will really appreciate.
Thanks!!
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