Marginal and Interaction Effects in Ordered Response Models

Mallick, Debdulal (2008): Marginal and Interaction Effects in Ordered Response Models.

Abstract

In discrete choice models the marginal effect of a variable of interest that is interacted with another variable differs from the marginal effect of a variable that is not interacted with any variable. The magnitude of the interaction effect is also not equal to the marginal effect of the interaction term. I present consistent estimators of both marginal and interaction effects in ordered response models. This procedure is general and can easily be extended to other discrete choice models.

• Item Type: MPRA Paper
• Language: English
• Keywords: Marginal effect, interaction effect, ordered probit
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C12 - Hypothesis Testing: General; C - Mathematical and Quantitative Methods > C2 - Single Equation Models; Single Variables > C25 - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions

References

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Boes, S., Winkelmann, R., 2006. Ordered Response Models. Allgemeines Statistisches Archiv 90 (1, March), 167-181.

Spanos, Aris, 1999. Probability Theory and Statistical Inference: Econometric Modeling with Observational Data. Cambridge University Press, New York.