Dear Stata experts,
i am using 2sls to estimate the impact of water quality on health with state 14.
My explanatory variable is binary (safe water =0 , unsafe water= 1) and my Instrument is also binary (community level water quality).
I wanted to plot the first and 2nd stage residuls. The results are like that . Is there any issue for binary variable? I attach the graphs. For height-for-age, outcome variable is binary.
First stage Array ... 2nd Stage HAZ 2nd stage- Diarrhea Array 2nd stage HAZ Array
The coefficient for the first stage and residuals are similar.
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