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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