Applied Econometrics Lecture 15: Sample Selection Bias …
where ( ) is the inverse Mills ratio (see Section 1 in the appendix for a derivation of the inverse Mills ratio). We now have a fully parametric expression for the expected value of y 1;conditional on observable variables x, and selection into the sample (y 2 = 1): E(y 1jx;y 2 = 1) = x 1 + (x 2). 2.1.1. Exogenous sample selection: E(u 1j v 2 ...
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