# Re: st: mlogit and mfx -- statistical significance

 From "David Zetland" To statalist@hsphsun2.harvard.edu Subject Re: st: mlogit and mfx -- statistical significance Date Wed, 26 Mar 2008 07:44:57 -0700

```Maartin,

Thanks for your response (my understanding = "there is a reason for
the difference" :)

>  > Should I care? What can be done about it? How do I interpret results?

If gender is insignificant in MLOGIT but significant in MFX (or vice
versa), which result should I scream from the rooftops?

Thanks!

David

On Wed, Mar 26, 2008 at 7:42 AM, David Zetland <dzetland@gmail.com> wrote:
> Date: Tue, 25 Mar 2008 11:26:27 +0000 (GMT)
>  From: Maarten buis <maartenbuis@yahoo.co.uk>
>  Subject: Re: st: mlogit and mfx -- statistical significance
>
>  The reason for such a difference is that there is a subtle difference
>  in what these two measures measure: The output from -mlogit- gives you
>  a test whether the odds ratio (*) is significantly different from 1,
>  while -mfx- gives you a change in probabilities.
>
>  Say the odds ratio is 10, but the baseline odds is .0001 success for
>  every failure, so we are talking about comparing a odds of .0001 with
>  an odds of .001, which corresponds to a probabilities .00009999 and
>  .000999, leading to a risk difference (result of -mfx-) of .00089901 .
>
>  So a big sounding odds ratio of 10 can easily correspond to a very
>  small sounding risk difference of .0009 . The reason is that by
>  computing the ratio of odds, the baseline odds drops out, so whith odds
>  ratios you only look groups are different but leave out the fact that
>  those differences hardly matter if probability of success is very high
>  or very low for everybody.
>
>  Hope this helps,
>  Maarten
>
>  (*) Some disciplines don't call the parameters of -mlogit- log odds
>  ratios, but they are the log of a ratio of odds, so I think the other
>  disciplines are correct in refering to them as log odds ratios, for
>  more on this see:
>  http://www.stata.com/statalist/archive/2007-02/msg00085.html
>
>  Ps. has anybody noticed that I have refrained from repeating my
>  favourite feature request?
>
>  - --- David Zetland <dzetland@gmail.com> wrote:
>
>  > Can anyone explain why some RHS vars are significant in <mlogit> but
>  > not in <mfx> (and vice versa)?
>  >
>  > I have several RHS dummies, but the problem also shows up with
>  > <margeff>
>  >
>  > Should I care? What can be done about it? How do I interpret results?
>  >
>  > I have searched the FAQs and forums and seen similar questions but no