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From |
"Daniel Mueller" <[email protected]> |

To |
<[email protected]> |

Subject |
st: RE: Multinomial logit |

Date |
Thu, 24 Jul 2003 08:50:20 +0200 |

> From: Ronnie Babigumira > Sent: Wednesday, July 23, 2003 11:22 PM > > Hi, (using stata8, win2K). I have a household data set and > would like to explain the choice of coping strategies. > > 3 main strategies are used by households however, some > households choose more than one strategy. After looking at > the data, I have 6 "strategies". 3 are pure (if a household > pursues either 1, 2 or 3 exclusively) and 3 are mixed > strategies (combinations of the pure ones to give new > strategies 4, 5 and 6). The data would look something like this > > hhid strategy > 1 2 > 2 3 > 3 1 > 4 5 > 5 4 > 6 1 > 7 6 > > I have been thinking of using a multinomial logit. My > question is, is the fact that strategy 2 is nested in 6 > (which is a combination of 2 and 3) and problem. It is indeed a problem as MNL assumes the disturbances to be independently distributed. The calculated probabilities would be unaffected if you add another category (the classic example is the redbus/blue bus paradoxon -- Maddala (1983): Limited-dependent and qualitative variables in econometrics. Cambridge University Press). This phenomenon is called the 'independence of irrelevant alternatives' (IIA). In your example strategy 2 and 6 would have a certain relationship. The relative probability of observing strategy 2 would probably decrease if you add strategy 6 to the set of alternatives. So the assumption of IIA would be violated leading to inefficient (however, according to Greene, not inconsistent) estimates. To test for IIA you could use e.g. -mlogtest-. A nested logit is probably more appropriate in your case. Other alternatives to get around could be multilevel modelling (-gllamm-). HTH, Daniel * * For searches and help try: * http://www.stata.com/support/faqs/res/findit.html * http://www.stata.com/support/statalist/faq * http://www.ats.ucla.edu/stat/stata/

**Follow-Ups**:**st: RE: RE: Multinomial logit***From:*"Ronnie Babigumira" <[email protected]>

**References**:**st: Multinomial logit***From:*"Ronnie Babigumira" <[email protected]>

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