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Re: st: Binary Choice Model and fixed effects - interpreting the interaction effects?


From   Maarten Buis <maartenlbuis@gmail.com>
To   statalist@hsphsun2.harvard.edu
Subject   Re: st: Binary Choice Model and fixed effects - interpreting the interaction effects?
Date   Mon, 2 Apr 2012 15:17:32 +0200

On Mon, Apr 2, 2012 at 2:37 PM, Benjamin Niug  wrote:
> @Maarten. Thanks. I tried to calculated the marginal effects as
> indicated in the paper you mentioned (M.L. Buis (2010) "Stata tip 87:
> Interpretation of interactions in non-linear models", The Stata
> Journal, 10(2), pp. 305-308)
>
> However, some interactions are not estimated / "estimable" by Stata
> using the -margins- command.

The point of that article is that you should _not_ estimate marginal
effects. In that article I tried to be nice towards Edward Norton and
colleagues and tried to find some situation where marginal effects
might make some sense. I did find such a special situation in the case
of a fully saturated model(*), but in practice you should just forget
about that and go for odds ratios. In retrospect that inclusion of
marginal effects in the article was a mistake as this confuses more
than it helps.

So the bottom line is: There is only one solution and that is to
interpret the results in terms of odds ratios.

Hope this helps,
Maarten

(*) A fixed effects model with covariates cannot be a fully saturated
model, so this is not an "escape route" open to you. You really really
really have no other option than to learn how to use and report odds,
odds ratios and ratios of odds ratios.



--------------------------
Maarten L. Buis
Institut fuer Soziologie
Universitaet Tuebingen
Wilhelmstrasse 36
72074 Tuebingen
Germany


http://www.maartenbuis.nl
--------------------------
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