The first-stage in the Heckman selection correction is estimating
A)the individual's self-selection decision and using those estimates to calculate predicted values of the self-selection decision.
B)estimating the regression model and calculating the residuals.
C)the individual's self-selection decision and using those estimates to calculate inverse Mill's ratios.
D)estimating the regression model and calculating the residuals and using those estimates to calculate predicted values of the dependent variable.

Question

Quizplus · Accepted Answer

The first stage in the Heckman selection correction is estimating the individual's self-selection decision and using those estimates to calculate inverse Mill's ratios. This involves estimating a probit model to predict the probability of being selected into the sample, and then calculating the inverse Mill's ratio for each observation.

The First-Stage in the Heckman Selection Correction Is Estimating