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Re: st: RE: Fractional Logit


From   "Clive Nicholas" <Clive.Nicholas@newcastle.ac.uk>
To   statalist@hsphsun2.harvard.edu
Subject   Re: st: RE: Fractional Logit
Date   Fri, 28 Oct 2005 23:49:59 +0100 (BST)

Rijo John replied to Nick Cox:

> Thanks Nick. I am trying to estimate the impact of spending on a
> particular commodity (say X) on the purchase of other goods and services.
> So I have the share of, say commodity Y (Its share in household budget)
> as the dependent variable and the expenditure on commodity X along
with
> various control variables for household as explanatory variables. This
> can be a standrad OLS estimation. But since the depended variable is a
> fraction and  is bound between 0 and 1 we go for fractional logit model.
>
> I hope this clarifies the problem. Given this I would like to know what
> would be the right choice of family and link in GLM.
>
> "family(gaussian) link(logit)" or "family(binomial) link(logit)" or some
> other combination?
>
> in "family(binomial) link(logit)" is it tru that stata takes all values
> other than 0 in the dependent variable as 1. If thats the case it does
> not take the budget share (absolute amount) information into account. It
> will only see if the budget share is absent or not.

Since your dependent variable is a fractional, or 'compositional',
variable ranging continuously from 0 to 1, another alternative is to use
Sean 'Jack' Buckley's -mlbeta-. This allows maximum likelihood estimation
with Beta-distributed dependent variables, as well as modelling separate
equations for both a mean and dispersion effect. This routine is _not_
downloadable from SSC, so type:

. net from http://www2.bc.edu/~bucklesj

and then click on -mlbeta-. Hope that helps.

CLIVE NICHOLAS        |t: 0(044)7903 397793
Politics              |e: clive.nicholas@ncl.ac.uk
Newcastle University  |http://www.ncl.ac.uk/geps

Whereever you go and whatever you do, just remember this. No matter how
many like you, admire you, love you or adore you, the number of people
turning up to your funeral will be largely determined by local weather
conditions.

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