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Probit and Logit Models (Binary Outcome Models)

Probit and Logit models are binary outcome models used to predict the probability of an event occurring. The dependent variable in these models is a binary response, commonly coded as a 0 or 1 variable. The linear probability model is also discussed, but it has the clear drawback of not being able to capture the […]

How to Do Propensity Score Matching

Propensity Score Matching in Stata using teffects Note: readers interested in this article should also be aware of King and Nielson’s 2019 paper Why Propensity Scores Should Not Be Used for Matching. For many years, the standard tool for propensity score matching in Stata has been the psmatch2 command, written by Edwin Leuven and Barbara Sianesi. However, Stata […]

Propensity Score Matching – An Introduction

Propensity score matching is a non-experimental causal inference technique. It attempts to balance the treatment groups on confounding factors to make them comparable so that we can draw conclusions about the causal impact of a treatment on the outcome using observational data. This is important when AB testing is not feasible or simply not an option. In this […]

Propensity score matching (PSM) – STATA

Propensity score matching (PSM) is a quasi-experimental method in which the researcher uses statistical techniques to construct an artificial control group by matching each treated unit with a non-treated unit of similar characteristics. Using these matches, the researcher can estimate the impact of an intervention. Matching is a useful method in data analysis for estimating the impact of a program […]

What is Structural Equation Modeling (SEM) analysis?

Structural Equation Modeling (SEM) analysis is a statistical method used in social science studies for testing the linkage between multiple variables at any point in time. SEM analysis is an extension of the simple linear model. For example, there are many factors that affect the organizational commitment and the job satisfaction level of an employee. If the impact […]

How to perform panel data analysis in E-Views?

E- Views offer an impressive toolkit that involves the series or the group of series that allows estimating panel data analysis ranging from the simplest to the complex types.  Performing data analysis in E-views is easier to understand as all the necessary statistical modelling can be performed by estimating the regression equation.  In addition to this, E-views […]

How to Interpret the Results of a Unit Root Test in Eviews

To interpret the results of a unit root test in EViews, you should consider the test statistic, p-value, and critical values. If the test statistic is less than the critical value, you may reject the null hypothesis of a unit root and conclude that the series is stationary. The p-value indicates the probability of obtaining […]

How to perform Heteroscedasticity test in STATA for time series data

Heteroskedastic means “differing variance” which comes from the Greek word “hetero” (‘different’) and “skedasis” (‘dispersion’). It refers to the variance of the error terms in a regression model in an independent variable. If heteroscedasticity is present in the data, the variance differs across the values of the explanatory variables and violates the assumption. This will […]

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