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Simplified Marginal Effects in Discrete Choice Models


  • Newell, Richard

    () (Resources for the Future)

  • Anderson, Soren


We show that after a simple normalization of explanatory variables so that they equal zero at some desired reference point, marginal effects for continuous variables in probit and logit models simplify dramatically, becoming a function of only the estimated constant term. We present similar simplifications for computation of the asymptotic variance of marginal effects, as well as for the effects of dummy variables on predicted probabilities. We provide a simple table, which in combination with raw probit or logit estimates, is all one needs to compute the desired effects.

Suggested Citation

  • Newell, Richard & Anderson, Soren, 2003. "Simplified Marginal Effects in Discrete Choice Models," Discussion Papers dp-03-38, Resources For the Future.
  • Handle: RePEc:rff:dpaper:dp-03-38

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    References listed on IDEAS

    1. Suzi Kerr & Richard G. Newell, 2003. "Policy-Induced Technology Adoption: Evidence from the U.S. Lead Phasedown," Journal of Industrial Economics, Wiley Blackwell, vol. 51(3), pages 317-343, September.
    2. Helfand, Gloria E, 1991. "Standards versus Standards: The Effects of Different Pollution Restrictions," American Economic Review, American Economic Association, vol. 81(3), pages 622-634, June.
    3. Malueg, David A., 1989. "Emission credit trading and the incentive to adopt new pollution abatement technology," Journal of Environmental Economics and Management, Elsevier, vol. 16(1), pages 52-57, January.
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    Cited by:

    1. Carlevaro, Fabrizio & Senegas, Marc-Alexandre, 2006. "Simplified marginal effects in discrete choice models: A correction," Economics Letters, Elsevier, vol. 92(1), pages 44-46, July.
    2. Pambo, Kennedy Otieno & Olila, Dennis Opiyo, 2014. "What determines consumption of fortified foods in Kenya: the potential for micronutrient malnutrition control," Miscellaneous Papers 166691, Agecon Search.
    3. Banerjee, Swagata (Ban) & Martin, Steven W. & Roberts, Roland K. & Larson, James A. & Hogan, Robert J., Jr. & Johnson, Jason L. & Paxton, Kenneth W. & Reeves, Jeanne M., 2007. "Adoption of Conservation-Tillage Practices in Cotton Production," 2007 Annual Meeting, February 4-7, 2007, Mobile, Alabama 34842, Southern Agricultural Economics Association.
    4. Webber, Don J. & Freke, Martin, 2006. "Church organists: Analysing their willingness to play," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 35(5), pages 854-867, October.
    5. Anderson, Soren T. & Newell, Richard G., 2004. "Information programs for technology adoption: the case of energy-efficiency audits," Resource and Energy Economics, Elsevier, vol. 26(1), pages 27-50, March.
    6. Pambo, Kennedy O. & Okello, Julius J. & Mbeche, Robert & Kinyuru, John N., 2016. "Consumer Acceptance of Edible Insects for Non-Meat Protein in Western Kenya," 2016 AAAE Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 246317, African Association of Agricultural Economists (AAAE).
    7. Grammenos, Costas Th. & Papapostolou, Nikos C., 2012. "US shipping initial public offerings: Do prospectus and market information matter?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(1), pages 276-295.
    8. Elias Katsikas & Theologos Dergiades, 2012. "Revising higher education policy in Greece: filling the Danaids’ Jar," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 39(3), pages 279-292, August.
    9. Liu, Lu, 2014. "Extreme downside risk spillover from the United States and Japan to Asia-Pacific stock markets," International Review of Financial Analysis, Elsevier, vol. 33(C), pages 39-48.
    10. Pambo, Kennedy Otieno & Otieno, David Jakinda & Okello, Julius Juma, 2014. "Prospects for Biofortification Reducing Micronutrient Deficiency in Kenya: Lessons from Sugar Fortification Programmes," 18th ICABR Conference, June 17-20, 2014, Nairobi, Kenya 174531, International Consortium on Applied Bioeconomy Research (ICABR).
    11. Elias Katsikas & Theologos Dergiades, 2009. "Higher Education Policy in Greece: Filling the Danaids' Jar," Discussion Paper Series 2009_16, Department of Economics, University of Macedonia, revised Nov 2009.
    12. Eberechukwu Onukwugha & Jason Bergtold & Rahul Jain, 2015. "A Primer on Marginal Effects—Part I: Theory and Formulae," PharmacoEconomics, Springer, vol. 33(1), pages 25-30, January.

    More about this item


    logit; probit; discrete choice; binary choice; marginal effect; data normalization;

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access

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