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Ordered Response Models

  • Stefan Boes

    ()

    (Socioeconomic Institute, University of Zurich)

  • Rainer Winkelmann

    ()

    (Socioeconomic Institute, University of Zurich)

We discuss regression models for ordered responses, such as ratings of bonds, schooling attainment, or measures of subjective well-being. Commonly used models in this context are the ordered logit and ordered probit regression models. They are based on an underlying latent model with single index function and constant thresholds. We argue that these approaches are overly restrictive and preclude a flexible estimation of the effect of regressors on the discrete outcome probabilities. For example, the signs of the marginal probability effects can only change once when moving from the smallest category to the largest one. We then discuss several alternative models that overcome these limitations. An application illustrates the benefit of these alternatives.

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File URL: http://www.soi.uzh.ch/research/wp/2005/wp0507.pdf
File Function: First version, 2005
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Paper provided by Socioeconomic Institute - University of Zurich in its series SOI - Working Papers with number 0507.

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Length: 21 pages
Date of creation: Mar 2005
Date of revision:
Publication status: Published in Allgemeines Statistisches Archiv 90, 2006, pages 165-179
Handle: RePEc:soz:wpaper:0507
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  1. Stefan Boes & Rainer Winkelmann, 2004. "Income and Happiness: New Results from Generalized Threshold and Sequential Models," SOI - Working Papers 0407, Socioeconomic Institute - University of Zurich.
  2. Yves Schneider & Peter Zweifel, 2004. "How Much Internalization of Nuclear Risk Through Liability Insurance?," Journal of Risk and Uncertainty, Springer, vol. 29(3), pages 219-240, December.
  3. Borek, Thomas & Bühler, Stefan & Schmutzler, Armin, 2003. "Weddings with Uncertain Prospects - Mergers under Asymmetric Information," CEPR Discussion Papers 3839, C.E.P.R. Discussion Papers.
  4. Bruno S. Frey & Simon Luechinger & Alois Stutzer, . "Valuing Public Goods: The Life Satisfaction Approach," IEW - Working Papers 184, Institute for Empirical Research in Economics - University of Zurich.
  5. Andreas Polk & Armin Schmutzler, 2003. "Lobbying against Environmental Regulation vs. Lobbying for Loopholes," SOI - Working Papers 0301, Socioeconomic Institute - University of Zurich.
  6. Zava Aydemir & Stefan Buehler, 2002. "Estimating Vertical Foreclosure in U.S. Gasoline Supply," SOI - Working Papers 0212, Socioeconomic Institute - University of Zurich.
  7. Michael A. Shields & Stephen Wheatley Price, 2005. "Exploring the economic and social determinants of psychological well-being and perceived social support in England," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 168(3), pages 513-537.
  8. Dennis Gaertner & Daniel Halbheer, 2004. "Are There Waves in Merger Activity After All?," SOI - Working Papers 0414, Socioeconomic Institute - University of Zurich, revised Feb 2006.
  9. Everitt, B. S., 1988. "A finite mixture model for the clustering of mixed-mode data," Statistics & Probability Letters, Elsevier, vol. 6(5), pages 305-309, April.
  10. Samuel Muehlemann & Juerg Schweri & Rainer Winkelmann & Stefan C. Wolter, 2005. "A Structural Model of Demand for Apprentices," SOI - Working Papers 0504, Socioeconomic Institute - University of Zurich.
  11. Frey, Bruno S & Stutzer, Alois, 2000. "Happiness, Economy and Institutions," Economic Journal, Royal Economic Society, vol. 110(466), pages 918-38, October.
  12. Shields, Michael A. & Wheatley Price, Stephen, 2001. "Exploring the Economic and Social Determinants of Psychological and Psychosocial Health," IZA Discussion Papers 396, Institute for the Study of Labor (IZA).
  13. Bellemare, C. & Melenberg, B. & van Soest, A.H.O., 2002. "Semi-parametric Models for Satisfaction with Income," Discussion Paper 2002-87, Tilburg University, Center for Economic Research.
  14. Mahler, Philippe & Winkelmann, Rainer, 2004. "Single Motherhood and (Un)Equal Educational Opportunities: Evidence for Germany," IZA Discussion Papers 1391, Institute for the Study of Labor (IZA).
  15. repec:dgr:kubcen:200287 is not listed on IDEAS
  16. Winkelmann, Liliana & Winkelmann, Rainer, 1998. "Why Are the Unemployed So Unhappy? Evidence from Panel Data," Economica, London School of Economics and Political Science, vol. 65(257), pages 1-15, February.
  17. Ulf Olsson, 1979. "Maximum likelihood estimation of the polychoric correlation coefficient," Psychometrika, Springer, vol. 44(4), pages 443-460, December.
  18. Stewart, Mark B., 2005. "A comparison of semiparametric estimators for the ordered response model," Computational Statistics & Data Analysis, Elsevier, vol. 49(2), pages 555-573, April.
  19. Bühler, Stefan & Schmutzler, Armin, 2003. "Who Integrates?," CEPR Discussion Papers 4066, C.E.P.R. Discussion Papers.
  20. Yves Schneider & Peter Zweifel, 2005. "Spatial Effects in Willingness-to-Pay: The Case of Two Nuclear Risks," SOI - Working Papers 0502, Socioeconomic Institute - University of Zurich, revised Sep 2007.
  21. Daniel Halbheer & Sarah Niggli & Armin Schmutzler, 2006. "What Does it Take to Sell Environmental Policy? An Empirical Analysis of Referendum Data," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 33(4), pages 441-462, 04.
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