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st: Re: Fixed effect logit
A very belated thank you for taking the time to answer.
My best wishes to you.
Date: Fri, 12 Mar 2004 03:33:30 -0500 (EST)
From: Michael Ash <email@example.com>
Subject: st: Fixed effect logit
- - A panel that always has the same outcome does not
contribute to identification in a FE logit because the best
intercept term, or fixed effect, for such a unit would be
- -infinity for always 0 and +infinity for always 1. This
explains the 2642 groups that are dropped: each household is
either always poor or always nonpoor.
- - There is a Stata FAQ that addresses the first "note":
Identification in FE logit comes from comparing patterns of
0 and 1 outcomes among households that have the same total
number of 1 outcomes over the course of the panel. An older
estimation method could run into problems if the number of
1's within a panel was large (>1), hence the warning, but
the FAQ says not to worry. Also, since your panel is two
years, after you (Stata) drop all of the (0,0)'s and (1,1)'s
you will have only (0,1)'s and (1,0)'s; so there will no
longer be multiple positive outcomes within groups.
Michael Ash, Assistant Professor
of Economics and Public Policy
Department of Economics and CPPA
University of Massachusetts
Amherst, MA 01003
Tel 413-545-6329 Fax 413-545-2921
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