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LIMDEP FAQ
How to Run Statistical Analysis using LimDep for Windows

1. Introduction

LimDep is econometric software developed by William H. Greene, the author of Econometric Analysis. It provides parameter estimation for linear and nonlinear regression models and qualitative and limited dependent models for across section, time series, and panel data. (The name LimDep is derived from LIMited DEPendent models.)  LimDep 7.0 for Windows 95, 98 and NT is a major update of Version 7.0 of LimDep. This release includes a few new models to LimDep. In addition, NLOGIT has been upgraded to version 2.0.  includes multinomial probit, hetereoscedastic extreme value, covariance heterogeneity, and random parameters logit besides multinomial logit model and nested logit. 

This page is designed to provide very basic knowledge on how to run statistical analysis on LimDep for Windows. LimDep opens multiple windows as it proceeds. When you start LimDep from your desktop, LimDep starts with a window called Untitled Project as shown below. A project consists of the data that you are going to analyze,  the results of your analysis, and procedures that you have used. LimDep only allows one active project at a time. 

2. Inputting Data

• Via Stat/Transfer

The easiest way of inputting data into LimDep for Windows is to convert your data file into LimDep for Windows format (with file extension .lpj) using Stat/Transfer. From within LimDep you can simply open the data file from File control manual. One subtle point is that LimDep data format for Windows is different from LimDep for Unix and Stat/Transfer only handles LimDep for Windows. If you have a dataset in LimDep for Unix format, you need first to convert it into ASCII format within LimDep for Unix and then convert it into LimDep for Windows format using Stat/Transfer. 

• Excel Data

It is very easy to read an Excel data file to LimDep for Windows. Assuming that you have allocated enough memory inside LimDep, you can simply issue the command Import Variables  from the pull-down menu Project and open your Excel file from there. The only thing to keep in mind is that LimDep only reads Excel 4.0 (or 3.0). If you have a newer version Excel file, you have to first open your Excel file in Excel and save it to an older version.  

•  Via Command READ

If your data file is in ASCII format, you can read your data using LimDep command READ to read in the data file. The ASCII data file can have commas, tabs or simply spaces as delimiters. Missing values can be coded as "."  

There are two ways of issuing a command within LimDep. One way is via a command dialog box where one can type a command such as READ to read in a data file. The other way is via a command window where one can enter multiple commands and save it as a program file for later use. Let's focus on the second way here. We first need to open a command window. This is done from File control manual by choosing New option. A dialog window will pop up asking for the type of new window we want open. Choose Text/Command Document and click on OK.



Now we can enter our commands in the command windows, highlight the commands we want to run and run it using Run control manual. Here is an example with an ASCII data file from Greene's Econometric Analysis. This data file is for example 19.18 in the book. We call this data file travel.txt and have stored it on our local computer. It has 840 observations and 7 variables. Part of the file is shown below. 

Mode   Ttme   Invc    Invt      GC     Hinc    PSize
 0      69      59     100      70      35       1  
 0      34      31     372      71      35       1  
 0      35      25     417      70      35       1  
 1       0      10     180      30      35       1  
 0      64      58      68      68      30       2  
 0      44      31     354      84      30       2  
 0      53      25     399      85      30       2  
 1       0      11     255      50      30       2  
 0      69     115     125     129      40       1  
 0      34      98     892     195      40       1  
 0      35      53     882     149      40       1  
 1       0      23     720     101      40       1  
  0      64      49      68      59      70       3   
.................................................
..............more observations..................
.................................................

We entered  the READ command shown below to our command window. After running it, we have our data file travel.txt read in correctly shown in the project window. You can see that we have 840 rows and 7 variables with their names shown below.

Read ; Nobs=840 ; Nvar=7 ; Names = 1;
File = "e:\limdep\data\travel.txt" $

3. Running Analysis

• Descriptive Statistics

One way of checking that we have input our data correctly is to run some descriptive statistics on the data set. It is fairly straightforward in LimDep to do so. Descriptive Statistics is in Data Description in the Model pull-down manual as shown below. A window with a list of variables will pop up so you can choose the variables. Variable ONE is created by LimDep to be constant 1 and is used if we want to include the constant term in statistical analysis. 

• Creating new variables

Creating a new variable in LimDep can be done through Project pull-down manual shown below. 

There are many choices of functions we can use for creating a new variable. For example, we created four dummy variables for variable MODE. The screenshot below shows that we used function Dmy(4, 1) to create our first dummy variable for MODE. We did all the other dummy variables in the same way. We also created an interaction variable hincair between variabel HINC and the first dummy variable for MODE by simply entering the expression hinc*aasc in the Expression dialog box.  

• Running LimDep procedures

Most of the statistical analysis can be done through Model pull-down manual. For example, we can run  multinomial logit analysis on our travel data set to predict the outcome variable MODE based on our selected independent variables via NLOGIT command. We show how to carry our analysis out below.

• Choose the model

In Model pull-down manual, we choose Discrete Choice and then Nested Logit, since nested logit procedure includes multinomial logit as a special case and our data set is in the format for nested logit analysis already. 

• Building up model

Each individual has four choices of traveling mode and they are air, train, bus and car. We entered the information below. Variable MODE is the Choice variable, i.e.. the dependent variable. 

Now we have to specify our independent variables. So we need to switch to Options. Variables TTME, GC, AASC, TASC, BASC and HINCAIR are our predictor variables and we put them over as Attributes. We can also choose what we want to output, such as covariance matrix or marginal effect. But we will choose the default here and we ready to run it. 

• Running analysis 

 Clicking on Run button above, we get the following output. This matches with the result for unconditional nested logit in Example 19.18 of Greene's Econometric Analysis on page 869. You can save the output as a LimDep file with extension .lim, or you can simply copy and paste the result to a Word document. 

Notes: There are a lot of issues that we do not address here. This page serves as a start point for anyone who does not know LimDep for Windows at all but may want  to run some statistical analysis with LimDep. With LimDep's powerful NLOGIT procedure, one can indeed run very sophisticated statistical analysis and that is beyond what this page is all about. 

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