I am trying to run a simultaneous equation model which is based on ordered probit system. I have planned to approach this by two stage regression. As you know two stage regression makes use of predicted values of endogenous variables. So also predicted values can be either linear or categorical.

Now my question is which predicted value is advisable to consider ( the linear or categorical)  if my endogenous variables in the system of equations are ordered latent variables.

I really thank you for any assistance which you might be able to provide.

With kind regards,

Tenessa L.