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The Logit Model in Economics

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  • J.S. Cramer
  • G. Ridder

Abstract

This paper reviews aspects of the application of logit models in economics. We consider some economic models that lead to a simple or a multinomial logit specification. A detailed account is given of the possible specifications of the multinomial model. We stress the relationship between distributional assumptions and functional form assumptions. Some (mis)specification tests with individual data are discussed. Moreover, we present a new test. We also consider grouping of continuously recorded data, and the biases introduced by an inappropriate grouping.

Suggested Citation

  • J.S. Cramer & G. Ridder, 1988. "The Logit Model in Economics," Statistica Neerlandica, Netherlands Society for Statistics and Operations Research, vol. 42(4), pages 297-314, December.
    • Handle: RePEc:bla:stanee:v:42:y:1988:i:4:p:297-314
    DOI: 10.1111/j.1467-9574.1988.tb01241.x
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    Cited by:

    1. Vinko Muštra & Blanka Šimundić & Zvonimir Kuliš, 2020. "Does innovation matter for regional labour resilience? The case of EU regions," Regional Science Policy & Practice, Wiley Blackwell, vol. 12(5), pages 955-970, October.
    2. J. M. C. Santos Silva & Silvana Tenreyro, 2015. "Trading Partners and Trading Volumes: Implementing the Helpman–Melitz–Rubinstein Model Empirically," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 77(1), pages 93-105, February.
    3. Ochieng, Dennis O. & Ogutu, Sylvester O., 2022. "Supermarket contracts, opportunity cost and trade-offs, and farm household welfare: Panel data evidence from Kenya," World Development, Elsevier, vol. 149(C).
    4. Renes, Gusta & Ridder, Geert, 1995. "Are women overqualified," Labour Economics, Elsevier, vol. 2(1), pages 3-18, March.

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