How to create a binary series for probit/logit model?

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ahmiragaya
Posts: 1
Joined: Sat Apr 30, 2011 7:57 am

How to create a binary series for probit/logit model?

Postby ahmiragaya » Sat Apr 30, 2011 8:12 am

Hi,
I have a database of dividend paying and non-paying firms for 10 years, a total of 200 firms.
I would like to run a probit or logit regression, with paying/non-paying binary being the depedent variable, and variables such as firm size, profit, etc. being the independent.
Well, I have all the independent variables for each year, but how can I create the dependent binary variable? I know how many firms payed and did not pay dividends each year, but should I create one series for each year, or am I structuring this workfile entirely wrong (meaning I should not be working with years at all)?

any help would be great! thanks!

startz
Non-normality and collinearity are NOT problems!
Posts: 3798
Joined: Wed Sep 17, 2008 2:25 pm

Re: How to create a binary series for probit/logit model?

Postby startz » Sat Apr 30, 2011 10:37 am

I'd start with creating the binary variable for each obsevation, and running the probit or logit on all the micro data for a start.


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