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Re: st: mlogit and mfx -- statistical significance

From   David Airey <>
Subject   Re: st: mlogit and mfx -- statistical significance
Date   Tue, 25 Mar 2008 07:40:10 -0500


I will do it for you then.

It would be helpful if Stata reported the baseline odds to help interpretation.

On Mar 25, 2008, at 6:26 AM, Maarten buis wrote:

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,

(*) 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:

Ps. has anybody noticed that I have refrained from repeating my
favourite feature request?

--- David Zetland <> 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

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

The measure of a man is what he does with power. -- Plato

David Zetland ( 530-848-9208
PhD Candidate, Agricultural & Resource Economics, UC Davis
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Maarten L. Buis
Department of Social Research Methodology
Vrije Universiteit Amsterdam
Boelelaan 1081
1081 HV Amsterdam
The Netherlands

visiting address:
Buitenveldertselaan 3 (Metropolitan), room Z434

+31 20 5986715

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David C. Airey, Ph.D.
Pharmacology Research Assistant Professor
Center for Human Genetics Research Member

Department of Pharmacology
School of Medicine
Vanderbilt University
Rm 8158A Bldg MR3
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Nashville, TN 37232-8548

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