When should a Heckit model be used?
A)when the sample was not randomly selected
B)when the sample is small and error terms are not normally distributed
C)as the alternative model to run a Hausman test on a Tobit model
D)to minimize the variance of the error term when the sample selection process is suspect

Question

Quizplus · Accepted Answer

The Heckit model, or Heckman correction, is used when there is a sample selection bias, meaning the sample was not randomly selected. It corrects for this bias by modeling the selection process.

When Should a Heckit Model Be Used