*
* UNION.RPF
* Example of estimation of probit, logit and linear probability models
*
* RATS User's Guide, Example from Section 12.2.
* Adapted from Johnston and DiNardo(1997), pp 415-425
*
open data cps88.asc
data(format=prn,org=columns) 1 1000 age exp2 grade ind1 married $
lnwage occ1 partt potexp union weight high
*
table(smpl=union,title="Statistics for Union Members") / $
potexp exp2 grade married high
table(smpl=.not.union,title="Statistics for Non-Union Members") / $
potexp exp2 grade married high
*
* Fit a linear probability model. Do a histogram of the predicted
* "probabilities".
*
linreg union
# potexp exp2 grade married high constant
prj fitlp
density(type=histogram) fitlp / gx fx
scatter(style=bargraph,header="Histogram of Predicted Values from a LPM")
# gx fx
*
* Probit model. Show a scatter graph of the predicted probabilites of
* the probit vs the LPM. Include the 45 degree line on the graph.
*
ddv(dist=probit) union
# potexp exp2 grade married high constant
prj(dist=probit,cdf=fitprb)
scatter(style=dots,lines=||0.0,1.0||,$
header="Probit vs Linear Probability Model",$
hlabel="Predicted Probability(Probit)",$
vlabel="Predicted Probability(LP)")
# fitprb fitlp
*
* Evaluate the predicted effect of switching industries on individuals
* currently in low union industries. This is done by evaluating the
* predicted probabilities with the value of "high" turned on for all the
* individuals, then knocking out of the sample those who were already in
* a high union industry. The predicted probabilities are obtained by
* "dotting" the coefficients with the required set of variables, then
* evaluating the normal cdf (%cdf) at those values.
*
set z = %dot(%beta,||potexp,exp2,grade,married,1,1||)
set highprb = %if(high,%na,%cdf(z))
scatter(style=dots,vmin=0.0,lines=||0.0,1.0||,$
header="Effect of Industrial Affiliation on Workers in Low-Union Industries")
# fitprb highprb
*
* Logit model
*
ddv(dist=logit) union
# potexp exp2 grade married high constant
prj(dist=logit,cdf=fitlgt)
scatter(style=dots,lines=||0.0,1.0||,$
header="Probit vs Logit Model",$
hlabel="Predicted Probability(Probit)",$
vlabel="Predicted Probability(Logit)")
# fitprb fitlgt