These are my variables:
y1 - primary binary dependent variable
y2 - endogenous ordered categorical variable (rating scale)
z - binary instrumental variable
x1 to x10 - a mix of explanatory and control variables
So basically the regressions would look something like this:
- First Stage: reg y2 z x1 x2 x3 x4 x5 x6 x7 x8 x9 x10
- predict y2hat
- Second Stage: reg y1 y2hat x1 x2 x3 x4 x5 x6 x7 x8 x9 x10
I just want clarity about whether I should use ivregress 2sls, ivprobit, or something else. May you also explain how to interpret the results for whichever command I should use?
Thank you,
Natalia
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