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Testing the binomial fixed effects logit model, with an application to female labour supply


Winkelmann, Rainer; Xu, Lin (2022). Testing the binomial fixed effects logit model, with an application to female labour supply. Empirical Economics, 62(2):679-708.

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 nonlinear, requiring nonstandard panel data extensions. One possible approach is the binomial panel logit model with fixed effects (Machado in J Econom 119:73–98, 2004). We propose a new and simple implementation of this 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 nonlinear, requiring nonstandard panel data extensions. One possible approach is the binomial panel logit model with fixed effects (Machado in J Econom 119:73–98, 2004). We propose a new and simple implementation of this 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:Journal Article, not_refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Scopus Subject Areas:Physical Sciences > Statistics and Probability
Physical Sciences > Mathematics (miscellaneous)
Social Sciences & Humanities > Social Sciences (miscellaneous)
Social Sciences & Humanities > Economics and Econometrics
Uncontrolled Keywords:Proportions data, unobserved heterogeneity, conditional maximum likelihood, overdispersion
Language:English
Date:1 February 2022
Deposited On:08 Jul 2021 11:55
Last Modified:27 Jan 2024 02:37
Publisher:Springer
ISSN:0377-7332
OA Status:Hybrid
Publisher DOI:https://doi.org/10.1007/s00181-021-02034-2
Related URLs:https://doi.org/10.5167/uzh-170370
  • Content: Published Version
  • Language: English
  • Licence: Creative Commons: Attribution 4.0 International (CC BY 4.0)
  • Content: Accepted Version
  • Language: English