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On the ecological fallacy in discrete-choice models

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  • Herger, Nils

Abstract

In linear regressions, the ecological fallacy—the erroneous belief that aggregate-level coefficients coincide with individual-level coefficients—arises when individual outcomes depend on the group environment. This paper suggest that such “group effects” determine also the circumstances under which the ecological fallacy vanishes from basic discrete-choice models. In particular, when controlling for group effects, it is shown that the same coefficients arise from a conditional logit model, which is a popular framework to analyse individual choices, and a Poisson regression, which provides a framework to analyse the aggregate number (or count) of such choices across groups.

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  • Herger, Nils, 2020. "On the ecological fallacy in discrete-choice models," Journal of choice modelling, Elsevier, vol. 34(C).
    • Handle: RePEc:eee:eejocm:v:34:y:2020:i:c:s175553451930106x
    DOI: 10.1016/j.jocm.2019.100201
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    References listed on IDEAS

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    1. Paulo Guimarães & Octávio Figueirdo & Douglas Woodward, 2003. "A Tractable Approach to the Firm Location Decision Problem," The Review of Economics and Statistics, MIT Press, vol. 85(1), pages 201-204, February.
    2. Nils Herger, 2013. "On Discrete Location Choice Models," Working Papers 13.02, Swiss National Bank, Study Center Gerzensee.
    3. Nils Herger & Christos Kotsogiannis & Steve McCorriston, 2016. "Multiple taxes and alternative forms of FDI: evidence from cross-border acquisitions," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(1), pages 82-113, February.
    4. Barrios, Salvador & Huizinga, Harry & Laeven, Luc & Nicodème, Gaëtan, 2012. "International taxation and multinational firm location decisions," Journal of Public Economics, Elsevier, vol. 96(11), pages 946-958.
    5. Michela Gnaldi & Venera Tomaselli & Antonio Forcina, 2018. "Ecological Fallacy and Covariates: New Insights based on Multilevel Modelling of Individual Data," International Statistical Review, International Statistical Institute, vol. 86(1), pages 119-135, April.
    6. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521747387, November.
    7. Rainer Winkelmann, 2008. "Econometric Analysis of Count Data," Springer Books, Springer, edition 0, number 978-3-540-78389-3, October.
    8. Kramer, Gerald H., 1983. "The Ecological Fallacy Revisited: Aggregate- versus Individual-level Findings on Economics and Elections, and Sociotropic Voting," American Political Science Review, Cambridge University Press, vol. 77(1), pages 92-111, March.
    9. Kelejian, Harry H., 1995. "Aggregated heterogeneous dependent data and the logit model: A suggested approach," Economics Letters, Elsevier, vol. 47(3-4), pages 243-248, March.
    10. Herger, Nils & McCorriston, Steve, 2013. "On discrete location choice models," Economics Letters, Elsevier, vol. 120(2), pages 288-291.
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