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The Stata Journal
Volume 15 Number 1: pp. 3-20



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twopm: Two-part models

Federico Belotti
Centre for Economic and International Studies
University of Rome Tor Vergata
Rome, Italy
federico.belotti@uniroma2.it
Partha Deb
Hunter College and Graduate Center, CUNY
New York, NY
and National Bureau of Economic Research
Cambridge, MA
partha.deb@hunter.cuny.edu
Willard G. Manning
University of Chicago
Chicago, IL
Edward C. Norton
University of Michigan
Ann Arbor, MI
and National Bureau of Economic Research
Cambridge, MA
ecnorton@umich.edu
Abstract.  In this article, we describe twopm, a command for fitting two-part models for mixed discrete-continuous outcomes. In the two-part model, a binary choice model is fit for the probability of observing a positive-versus-zero outcome. Then, conditional on a positive outcome, an appropriate regression model is fit for the positive outcome. The twopm command allows the user to leverage the capabilities of predict and margins to calculate predictions and marginal effects and their standard errors from the combined first- and second-part models.
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