Hi
I am working around the endogeneity problem where both the outcome variable and endogenous independent variable are dichotomous. I did run ivregress 2SLS model and got meaningful results. I am also thinking of pursuing a control function approach instrumenting the endogenous predictor in the first step using logit and then including the residuals in the second step, logit model. The recommended way of doing this seems to be bootstrapping, but I am not sure whether the procedure below is correct.
1) Will this procedure (i.e. bootstrapping the whole program) lead to a reasonable estimate of the standard errors for the model?
2) Is estimating logit in both stages fine?
3) Will these commands entail two-stage residual inclusion with logit?
I am working with DHS data and am using Stata 17.
outcome variable: (d108)
binary endogenous regressor: whether woman is engaged paid work (occp)
instrument variable: cluster average of women's working status (occp-adj)
Any advice will be helpful. Thanking you.
I am working around the endogeneity problem where both the outcome variable and endogenous independent variable are dichotomous. I did run ivregress 2SLS model and got meaningful results. I am also thinking of pursuing a control function approach instrumenting the endogenous predictor in the first step using logit and then including the residuals in the second step, logit model. The recommended way of doing this seems to be bootstrapping, but I am not sure whether the procedure below is correct.
1) Will this procedure (i.e. bootstrapping the whole program) lead to a reasonable estimate of the standard errors for the model?
2) Is estimating logit in both stages fine?
3) Will these commands entail two-stage residual inclusion with logit?
I am working with DHS data and am using Stata 17.
outcome variable: (d108)
binary endogenous regressor: whether woman is engaged paid work (occp)
instrument variable: cluster average of women's working status (occp-adj)
Code:
program bsses preserve svy: logistic occp occp_adj predict pvhat,p gen uhat = occp - pvhat test occp_adj svy: logistic d108 i.occp uhat drop uhat restore end program bootstrap, reps(50): bsses

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