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A new condition for pooling states in multinomial logit

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  • Hong il Yoo

    (University of New South Wales)

Abstract

The Cramer-Ridder test is a popular procedure for testing if some outcome states can be pooled into one state in the multinomial logit model. We show that, in the presence of binary regressors, the test is overly stringent and poolability may not be tested unambiguously.

Suggested Citation

  • Hong il Yoo, 2012. "A new condition for pooling states in multinomial logit," Discussion Papers 2012-48, School of Economics, The University of New South Wales.
    • Handle: RePEc:swe:wpaper:2012-48
    as

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    File URL: http://research.economics.unsw.edu.au/RePEc/papers/2012-48.pdf
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    References listed on IDEAS

    as
    1. Chalkley, Martin & McVicar, Duncan, 2008. "Choice of contracts in the British National Health Service: An empirical study," Journal of Health Economics, Elsevier, vol. 27(5), pages 1155-1167, September.
    2. Diane M. Dancer & Denzil G. Fiebig, 2004. "Modelling Students at Risk," Australian Economic Papers, Wiley Blackwell, vol. 43(2), pages 158-173, June.
    3. Cramer, J. S. & Ridder, G., 1991. "Pooling states in the multinomial logit model," Journal of Econometrics, Elsevier, vol. 47(2-3), pages 267-272, February.
    4. Anh Ngoc Nguyen & Jim Taylor, 2003. "Post-high school choices: New evidence from a multinomial logit model," Journal of Population Economics, Springer;European Society for Population Economics, vol. 16(2), pages 287-306, May.
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    More about this item

    Keywords

    multinomial logit; pooling; statistical test;
    All these keywords.

    JEL classification:

    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions

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