As the outcome is a fraction and there are some 0 and 1 observations, the fractional response model -fracreg- seems suitable. I have followed the approach outlined on Stata's site for fractional response models.

My approach is

Code:

fracreg probit a b margins, dyex(_all)

I want to interpret this as the percent change in

*a*with a 1 % increase in

*b*. (I assume we obtain the relative percent - not the absolute percent point - increase in

*a*.).

What confuses me on the Stata "walkthrough" linked to above is that they write this after the elasticities are obtained:

A truly careful reader will have noticed that we typed

**dyex()**, not**eyex()**. The dependent variable is already a proportion and so is already on a percentage scale. We just need its change, not its percentage change.- When
*b*increase 1 %,*a*increases by .0022 percent? - Or do I need to multiply .0021 by 100 to interpret this as: When
*b*increase 1 %,*a*increases by .22 percent?

*b*increases by 10% then

*a*increases by .22 * 10 = 2.2 percent?

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