st: Interpretation of Log Transformed Independent Variables in Ordered Logit

 From Florian Köhler To Subject st: Interpretation of Log Transformed Independent Variables in Ordered Logit Date Tue, 2 Dec 2008 18:29:23 +0100

```Hey Statalisters,

Using the command ologit I ran some Ordered Logit regressions with one of
the covariates (number of a firm´s employees) in a log transformed form
(since theory suggest a declining marginal effect)

My question concerns the interpretation of the marginal effects of the
log-transformed variable "number of employees" (mfx are computed with
respect to the outcome variable =3) .

I would think the following interpretation is right:
- A marginal increase in the log-transformed number of employees
changes the probability of my outcome variable being 3 		  by XXX
percentage points.

But: By log-transforming my continous variable "employees" I could (or have
to) interpret the changes in terms of percent changes, something like
- A one percent increase in the number of employees (the actual
number, not the log-transformed)changes the probability 		of
my outcome variable being 3 by XXX percentage points.

Any hints on which version is right? Both, none?

Thanks

Florian

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