I urgently need a help. Hoping to get positive response from you all.
I am doing probit model where i am using an instrument. My dependent variable in vocational training which is a dummy (0 and 1) and have list of regressors. One of my regressors is remittance (remitt) which I suspect as endogenous. That's why I am using an instrument which is nonfarm (whether hh owns any nonfarm entrepreneurship) which is also a dummy (0 and 1). I have run the following regression:
The output looks like this:
Now my questions are:
1. Have I run the regression correctly?
2. Is it correct to use two step?
3. To get the marginal effect do I need to run "margins, dydx(*) post"?
4. How to know whether my model has endogeneity or not? What is the condition?
5. and last how to know whether my instrument is strong or weak?
If anyone please answer the questions sequentially that would help me a lot
Thank You.
I am doing probit model where i am using an instrument. My dependent variable in vocational training which is a dummy (0 and 1) and have list of regressors. One of my regressors is remittance (remitt) which I suspect as endogenous. That's why I am using an instrument which is nonfarm (whether hh owns any nonfarm entrepreneurship) which is also a dummy (0 and 1). I have run the following regression:
Code:
ivprobit vocationaltraining hhsize gender literacy uneduc_adults mfs_use loan scatosavings scatoassets mobile1 barisal chittagong khulna rajshahi rangpur sylhet members_in_agri agrishock distfacility3 (remitt = nonfarm), twostep
Code:
Two-step probit with endogenous regressors Number of obs = 18,366
Wald chi2(19) = 333.32
Prob > chi2 = 0.0000
---------------------------------------------------------------------------------
| Coef. Std. Err. z P>|z| [95% Conf. Interval]
----------------+----------------------------------------------------------------
remitt | -1.510386 .3144558 -4.80 0.000 -2.126708 -.8940643
hhsize | -.0329519 .0101655 -3.24 0.001 -.0528759 -.0130279
gender | -.8139006 .1565242 -5.20 0.000 -1.120683 -.5071187
literacy | .0023912 .0166741 0.14 0.886 -.0302895 .0350718
uneduc_adults | -.0912452 .0228638 -3.99 0.000 -.1360574 -.0464329
mfs_use | .1571294 .0352415 4.46 0.000 .0880574 .2262014
loan | -.0105326 .0366643 -0.29 0.774 -.0823934 .0613282
scatosavings | -.0001195 .0000965 -1.24 0.216 -.0003086 .0000697
scatoassets | .0000167 5.51e-06 3.04 0.002 5.95e-06 .0000275
mobile1 | .1492968 .0155468 9.60 0.000 .1188257 .179768
barisal | .03892 .0667708 0.58 0.560 -.0919483 .1697883
chittagong | -.0186855 .0620932 -0.30 0.763 -.1403859 .1030149
khulna | -.121161 .0584884 -2.07 0.038 -.2357961 -.0065259
rajshahi | -.0558219 .0584396 -0.96 0.339 -.1703615 .0587176
rangpur | -.1035035 .0597487 -1.73 0.083 -.2206088 .0136018
sylhet | .0893287 .0466704 1.91 0.056 -.0021436 .180801
members_in_agri | -.1848795 .0312157 -5.92 0.000 -.246061 -.1236979
agrishock | .0635239 .0460319 1.38 0.168 -.0266969 .1537448
distfacility3 | .0002565 .0033592 0.08 0.939 -.0063274 .0068404
_cons | -.3183147 .2404636 -1.32 0.186 -.7896148 .1529854
---------------------------------------------------------------------------------
Instrumented: remitt
Instruments: hhsize gender literacy uneduc_adults mfs_use loan scatosavings
scatoassets mobile1 barisal chittagong khulna rajshahi rangpur
sylhet members_in_agri agrishock distfacility3 nonfarm
---------------------------------------------------------------------------------
Wald test of exogeneity: chi2(1) = 23.97 Prob > chi2 = 0.0000
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end of do-file
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Now my questions are:
1. Have I run the regression correctly?
2. Is it correct to use two step?
3. To get the marginal effect do I need to run "margins, dydx(*) post"?
4. How to know whether my model has endogeneity or not? What is the condition?
5. and last how to know whether my instrument is strong or weak?
If anyone please answer the questions sequentially that would help me a lot
Thank You.
