Achim,

It needn't imply either, necessarily.  You might want to look into  
Anne Sartori's work on this subject.  She had an article in Political  
Analysis -- http://pan.oxfordjournals.org/cgi/content/abstract/ 
11/2/111 -- in which she derives a new estimator that improves on  
Heckman in a couple of ways that would be relevant to your  
situation.  Software for implementing her model in Stata is available  
from her webpage at http://www.princeton.edu/~asartori/ .

hth,
-Bear


Bear F. Braumoeller
Associate Professor
Department of Government
Harvard University
http://www.people.fas.harvard.edu/~bfbraum


On Feb 8, 2007, at 11:31 AM, Achim Kemmerling wrote:

> Dear Polmeth-members:
>
> I have a problem with Heckman models. I have found several  
> applications of this model for comparative political economy  
> purposes. In some of these rho is close to or equal to 1. In the  
> STATA reference manual I have found that such a rho should lead you  
> to reject the Heckman approach. Since I am also writing on a paper  
> using a Heckman model and I am facing similar problems I would like  
> to get some opinion on this. I use some 120 European regions of  
> which only 30-60 are observed on the (final) dependent variable. My  
> guess is that a rho equal to 1 - implying that the selection and  
> the regression process are equal - reveal two problems: either it  
> shows that sample size is not large enough for an iterative  
> estimation procedure, or that specification of the selection  
> process is poor.
>
> Can anyone help?
>
> Best
>
> Achim
>
> -- 
> Dr. Achim Kemmerling
> Research Fellow
> Social Science Research Centre Berlin (WZB)
> Reichpietschufer 50
> 10785 Berlin/ Germany
> Tel.: +49-(0)30-25491-150
> Fax.: +49-(0)30-25491-222
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