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Testing for Independence of Irrelevant Alternatives: Some Empirical Results

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  • Fry, Tim R. L.
  • Harris, Mark N.

Abstract

We estimate a multinomial Logit (MNL) model of U.K. Magistrates' Courts sentencing using a data set collected by the National Association for the Care and Resettlement of Offenders (NACRO) and test the independence of irrelevant alternatives (IIA) property using six tests. Conducting the tests with the appropriate asymptotic critical values we find that the acceptance or rejection of IIA depends both upon which test and which variant of a given test is used. The same tests are then performed using empirical critical values obtained by simulation and the resultant inferences compared. Our results show that empirical workers should exercise care when testing for IIA.

Suggested Citation

  • Fry, Tim R. L. & Harris, Mark N., "undated". "Testing for Independence of Irrelevant Alternatives: Some Empirical Results," Department of Econometrics and Business Statistics Working Papers 267431, Monash University, Department of Econometrics and Business Statistics.
    • Handle: RePEc:ags:monebs:267431
    DOI: 10.22004/ag.econ.267431
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    2. Gary Madden & Michael Simpson & Scott Savage, 2002. "Broadband Delivered Entertainment Services: Forecasting Australian Subscription Intentions," The Economic Record, The Economic Society of Australia, vol. 78(243), pages 422-432, December.
    3. Eric Pels & Peter Nijkamp & Piet Rietveld, 2001. "Airport and Airline Choice in a Multiple Airport Region: An Empirical Analysis for the San Francisco Bay Area," Regional Studies, Taylor & Francis Journals, vol. 35(1), pages 1-9.
    4. Wittberg, Emanuel & Erlingsson, Gissur, 2020. "Do Corrupt Local Governments Inhibit Entrepreneurship? A Contextual Analysis of Start-Ups in Swedish Municipalities," Working Paper Series 1323, Research Institute of Industrial Economics.
    5. Aroca Gonzalez, Patricio & Maloney, William F., 2005. "Migration, trade, and foreign investment in Mexico," Policy Research Working Paper Series 3601, The World Bank.

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