Sven: It's easy to extend Procedure 21.1 in my 2010 MIT Press book. In fact, if I ever get the 3rd edition finished, this will appear as a problem at the end of the chapter. It has come up before.
Let the 0 outcome be the base case. Then define dummy variables d1, d2, ..., d5 for the different implementation levels. Let w be the implementation level itself.
In the first stage, use ordered probit of w on all exogenous variables, including your instrument or instruments. Then you have to take some care to compute P(w = j) for j = 1,2, ..., 5 after the OP. The formulas for these probabilities are easy to find, and Stata should compute them after oprobit (although I've never done that).
Then, in the equation
y = b0 + x*b1 + a1*d1 + a2*d2 + ... + a5*d5 + u.
use the fitted probabilities as IVs for d1, d2, ..., d5. Of course, elements of x act as their own IVs.
I think this will do it. z1, ..., zm are the IVs:
This assumes that you have at least one strong instrument that affects w in the oprobit. The Wald statistic should be at least 10 (extrapolating from the linear case).
Hope this helps.
JW
Let the 0 outcome be the base case. Then define dummy variables d1, d2, ..., d5 for the different implementation levels. Let w be the implementation level itself.
In the first stage, use ordered probit of w on all exogenous variables, including your instrument or instruments. Then you have to take some care to compute P(w = j) for j = 1,2, ..., 5 after the OP. The formulas for these probabilities are easy to find, and Stata should compute them after oprobit (although I've never done that).
Then, in the equation
y = b0 + x*b1 + a1*d1 + a2*d2 + ... + a5*d5 + u.
use the fitted probabilities as IVs for d1, d2, ..., d5. Of course, elements of x act as their own IVs.
I think this will do it. z1, ..., zm are the IVs:
Code:
oprobit w x1 x2 ... xk z1 ... zm predict d0h d1h d2h d3h d4h d5h ivregress 2sls y x1 ... xk (d1 d2 d3 d4 d5 = d1h d2h d3h d4h d5h), robust
Hope this helps.
JW
If it is not, then how do I get the residuals from the oprobit, because they don't really appear to exist in the traditional way, see this answer by Ben Bolker.
As one extra question: Wooldridge mentions using fitted values as IV's, but the command is predict. Does the predict command actually give fitted values? Or is one of the two a mistake?
0 Response to How would I apply a control function approach (CF)/Two-Stage Residual Inclusion (2SRI), when the first stage is an ordinal probit/logit?
Post a Comment