Example 21.2 Tobit Analysis

The following statements show a subset of the Mroz (1987) data set. In these data, Hours is the number of hours the wife worked outside the household in a given year, Yrs_Ed is the years of education, and Yrs_Exp is the years of work experience. A Tobit model will be fit to the hours worked with years of education and experience as covariates.

By the nature of the data it is clear that there are a number of women who committed some positive number of hours to outside work ( is observed). There are also a number of women who did not work at all ( is observed). This gives us the following model:

where . The set of explanatory variables is denoted by .

   title1 'Estimating a Tobit model';
   
   data subset;
      input Hours Yrs_Ed Yrs_Exp @@;
      if Hours eq 0 then Lower=.;
         else               Lower=Hours;
   datalines;
   0 8 9 0 8 12 0 9 10 0 10 15 0 11 4 0 11 6
   1000 12 1 1960 12 29 0 13 3 2100 13 36
   3686 14 11 1920 14 38 0 15 14 1728 16 3
   1568 16 19 1316 17 7 0 17 15
   ;

   /*-- Tobit Model --*/
   proc qlim data=subset;
      model hours = yrs_ed yrs_exp;
      endogenous hours ~ censored(lb=0);
   run;

The output of the QLIM procedure is shown in Output 21.2.1.