RBA Annual Conference – 2015 Equation (2)

\begin{array}{l} d_{i t}^{*} = β_{1} H E_{i, t - 1} + γ x_{i, t - 1} + φ z_{i t} + ε_{i t}, ε_{i t} ~ N (0, σ^{2}) \\ d_{i t} = {\begin{matrix} d_{i t}^{*} if d_{i t}^{*} > 0 \\ 0 if d_{i t}^{*} \leq 0 \end{matrix} . \end{array}