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From |
paul jacobs <[email protected]> |

To |
[email protected] |

Subject |
st: Which probability to use as reference point in a conditional logit? |

Date |
Thu, 23 Jan 2014 14:54:37 -0500 |

Thank you in advance for looking at this; I tried very hard to be sure this question hasn't been answered before but apologies if that is the case. I am trying to interpret the marginal effects of several covariates after running a conditional logit model. My question concerns how to choose the correct reference point for comparing the size of these marginal effects. I first run a conditional logit model in stata (using the command, clogit) and then use the following postestimation command to retrieve marginal effects (which sets the fixed effects, which are person-level in my case, to zero): mfx, predict (pu0) The rationale for choosing that command is explained here: http://www.stata.com/support/faqs/statistics/predict-option-unsuitable/ My question is: how do I interpret the size of the marginal effects? On average, let's assume the people in my sample have 33.3 choices (each person chooses one and only one of the average of 33.3 choices), implying a mean probability across the sample of choosing any one outcome of ~3%. However, when the marginal effects are being calculated (and the individual fixed effects are suppressed), the mean predicted probability across the sample is 90%, which appears in the output for mfx with the pu0 option. (I've confirmed this independently as well.) Let's assume a particular covariate's marginal effect is a 1 percentage point increase in the probability of choosing an outcome. It matters greatly whether 3% or 90% is my reference point for comparing the relative size of that marginal effect. 3% seems like the better comparison because it is the actual probability of choosing an option across the sample but 90% is the predicted probability after suppressing fixed effects and the basis of the command which produced the marginal effects. Which one is the appropriate comparison and why? I am really stuck on this one; thank you Stata listserve members! * * For searches and help try: * http://www.stata.com/help.cgi?search * http://www.stata.com/support/faqs/resources/statalist-faq/ * http://www.ats.ucla.edu/stat/stata/

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