Calculating inverse Mill's ratio

[oksana]

Hi guys,

I'll greatly appreciate if someone could help me with the following. I've used Eviews mostly for OLS/GMM estimations and never used it for probit/logit analysis. Now I came to the point where my research requires estimation using the so-called "treatment effect" methodology. That is, I first need to estimate the "decision" equation where the dependent variable is a binary one, using probit. Then I have to take the inverse Mill's ratio from the estimation of the first probit equation and put it in the second (OLS) regression as an additional explanatory variable. I don't know how to calculate the Inverse Mills ratio. However, I found the article where the auhtors say that "after estimating a probit model, Eviews stores the inverse Mills' ratio for each observation under the series named RESID". I wonder, is it that simple? Does Eveiws really calculate the ratio automatically and stores it for each observation as a Resid series? Thanks a lot!!!

[EViews Gareth]

http://forums.eviews.com/search.php?key ... mit=Search

[oksana]

Thanks guys but... I'm not familar with programming in Eviews and have no idea as to what the parameters in the example codes you referred me to mean.... Any other ideas about the question I posted regarding whether or not Eveiws stores Inverse Mills ratio series as the RESID series???? Thanks:-)