Limited Dependent Variable Models

A limited dependent variable means that there is a limit or boundary on the dependent variable and some of the observations “hit” this limit. A limited dependent variable is a continuous variable with a lot of repeated observations at the lower or upper limit. Examples include the quantity of a product consumed, the number of hours that women work, etc. Limited dependent variable models address two issues: censoring and truncation. Censoring is when the limit observations are in the sample and truncation is when the observations are not in the sample.

Handouts, Programs, and Data

Limited Dependent Variable Models

Limited Dependent Variable Models Example

Limited Dependent Variable Models Stata Program and Output

Limited Dependent Variable Models in Stata.do

limdep_ambexp.dta

Limited Dependent Variable Models R Program and Output

Limited Dependent Variable Models in R.R

limdep_ambexp.csv

Limited Dependent Variable Models SAS Program and Output

Limited Dependent Variable Models in SAS.sas

limdep_ambexp.csv

Limited dependent variable models: topics covered

• Tobit model (using censored sample)

• Truncated regression (using truncated sample)

• Heckman model (sample selection model)