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Re: st: xtlogit, margins


From   Maarten Buis <maartenlbuis@gmail.com>
To   statalist@hsphsun2.harvard.edu
Subject   Re: st: xtlogit, margins
Date   Thu, 8 Nov 2012 13:36:15 +0100

On Wed, Nov 7, 2012 at 3:03 PM, JVerkuilen  wrote:
> There are some reasons to suppose that log-odds is better perceived
> than odds ratios or probabilities because they concatenate in a way
> that is psychophysically coherent, that is they add linearly.

To me an effect is just a comparison of groups (*). Such a comparison
can be done be computing a difference or a ratio. You can say group A
earns on average x euros/dollars/yen/pounds/... more than group B
(effect as a difference) or you can say group A earns on average y%
more than group B (effect as a ratio). I don't understand why one
statement would be more coherent than the other.

> The odds ratio makes sense as an approximation of relative risk
> so that's useful when the relative risk is desirable.

This misconception is the source of many errors. The safest thing is
to interpret odds ratios as odds ratios and risk ratios as risk ratios
and not try to see one as an approximation of the other. The
approximation only applies under special circumstances, and too often
people just conveniently forget that. If you want relative risk you
should estimate a model that return relative risks (-poisson-).

-- Maarten

(*) in case of a continuous variable the number of groups is very
large, but the principle remains the same.

---------------------------------
Maarten L. Buis
WZB
Reichpietschufer 50
10785 Berlin
Germany

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