Dear Sir/Madam,
Thank you very much for providing this kind of forum.
By this post, I would like to ask a question regarding stata method.
I would like to measure the impact of y1 on y2. using cross-sectional data from household survey with observation to the group of individuals. To avoid bias, I employed one IV, let's call it Z. the iv is an exogenous policy change.
I am willing to use 2SLS. The model is below,
y1 = α + β z + γ x1 + δx2 + e ............................ (1) 1st stage estimation
y1 = continuous variable measured in years
z = whether the individual treated by the policy or not. 1 for treated, if not is 0 (binary)
x1 = sex
x2 = age
y2 = α + β (y1) ̂ + γ x1+ δx2 + u ....................... (2) 2nd stage
y2 = measured by likert scale 1 to 4 (categorical variable)
My questions are,
1. to regress kind of variable, can I use logistic regression for 2nd stage, because I have read that for examiningikert scale, it is better to use logit. although the 1st estimate use ols, will it has impact to result of regression?
Is there any suitable solution with this kind of problem?
2. Should I test endogeneity by estat endog command to the instrumental variable?
thank you very much. Your help is really appreciated.
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