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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.econ.uzh.ch/static/wp_soi/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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  15. 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).
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  17. 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.
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