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Testing the binomial fixed effects logit model; with an application to female labor supply


Winkelmann, Rainer; Xu, Lin (2019). Testing the binomial fixed effects logit model; with an application to female labor supply. Working paper series / Department of Economics 321, University of Zurich.

Abstract

Regression models for proportions are frequently encountered in applied work. The conditional expectation function is bounded between 0 and 1 and therefore must be non-linear, requiring nonstandard panel data extensions. One possible approach is the binomial panel logit model with fixed effects (Machado, 2004). We propose a new and simple implementation of the conditional maximum likelihood estimator for standard software. We investigate the properties of the estimator under misspecification and derive a new test for overdispersion. Estimator and test are applied in a study of contracted working volumes, measured as proportion of full-time work, for women in Switzerland.

Abstract

Regression models for proportions are frequently encountered in applied work. The conditional expectation function is bounded between 0 and 1 and therefore must be non-linear, requiring nonstandard panel data extensions. One possible approach is the binomial panel logit model with fixed effects (Machado, 2004). We propose a new and simple implementation of the conditional maximum likelihood estimator for standard software. We investigate the properties of the estimator under misspecification and derive a new test for overdispersion. Estimator and test are applied in a study of contracted working volumes, measured as proportion of full-time work, for women in Switzerland.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:C23, J21
Uncontrolled Keywords:Proportions data, unobserved heterogeneity, conditional maximum likelihood, overdispersion
Language:English
Date:October 2019
Deposited On:15 Apr 2019 14:48
Last Modified:04 Oct 2019 08:34
Series Name:Working paper series / Department of Economics
Number of Pages:34
ISSN:1664-705X
Additional Information:Revised version
OA Status:Green
Official URL:https://www.econ.uzh.ch/static/release/workingpapers.php?id=1000

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