 Fitting and interpreting Cragg's tobit alternative using StataStata Journal, 2009, vol. 9, issue 4, 584-592 Abstract: In this article, I introduce the user-written command craggit, which simultaneously fits both tiers of Cragg’s (1971, Econometrica 39: 829–844) "two- tier" (sometimes called "two-stage" or "double-hurdle") alternative to tobit for corner-solution models. A key limitation to the tobit model is that the probability of a positive value and the actual value, given that it is positive, are determined by the same underlying process (i.e., the same parameters). Cragg proposed a more flexible alternative that allows these outcomes to be determined by separate processes through the incorporation of a probit model in the first tier and a truncated normal model in the second. Also, tobit is nested in craggit, making the latter a popular choice among "two-tier" models. In the article, I also present postestimation syntax to facilitate the understanding and interpretation of results. Keywords: craggit; two tier; two stage; double hurdle; corner-solution models; Craggit’s tobit (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:tsj:stataj:v:9:y:2009:i:4:p:584-592 Ordering information: This journal article can be ordered from Access Statistics for this article Stata Journal is currently edited by Nicholas J. Cox and Stephen P. Jenkins More articles in Stata Journal from StataCorp LLC |
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