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On the ecological fallacy in discrete-choice models

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  • Herger, Nils

Abstract

In linear regressions, the ecological fallacy—the erroneous belief that aggregate-level coefficients coincide with individual-level coefficients—arises when individual outcomes depend on the group environment. This paper suggest that such “group effects” determine also the circumstances under which the ecological fallacy vanishes from basic discrete-choice models. In particular, when controlling for group effects, it is shown that the same coefficients arise from a conditional logit model, which is a popular framework to analyse individual choices, and a Poisson regression, which provides a framework to analyse the aggregate number (or count) of such choices across groups.

Suggested Citation

  • Herger, Nils, 2020. "On the ecological fallacy in discrete-choice models," Journal of choice modelling, Elsevier, vol. 34(C).
    • Handle: RePEc:eee:eejocm:v:34:y:2020:i:c:s175553451930106x
    DOI: 10.1016/j.jocm.2019.100201
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    References listed on IDEAS

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    1. Paulo Guimarães & Octávio Figueirdo & Douglas Woodward, 2003. "A Tractable Approach to the Firm Location Decision Problem," The Review of Economics and Statistics, MIT Press, vol. 85(1), pages 201-204, February.
    2. Nils Herger & Christos Kotsogiannis & Steve McCorriston, 2016. "Multiple taxes and alternative forms of FDI: evidence from cross-border acquisitions," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(1), pages 82-113, February.
    3. Barrios, Salvador & Huizinga, Harry & Laeven, Luc & Nicodème, Gaëtan, 2012. "International taxation and multinational firm location decisions," Journal of Public Economics, Elsevier, vol. 96(11), pages 946-958.
    4. Michela Gnaldi & Venera Tomaselli & Antonio Forcina, 2018. "Ecological Fallacy and Covariates: New Insights based on Multilevel Modelling of Individual Data," International Statistical Review, International Statistical Institute, vol. 86(1), pages 119-135, April.
    5. Rainer Winkelmann, 2008. "Econometric Analysis of Count Data," Springer Books, Springer, edition 0, number 978-3-540-78389-3, December.
    6. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555.
    7. Herger, Nils & McCorriston, Steve, 2013. "On discrete location choice models," Economics Letters, Elsevier, vol. 120(2), pages 288-291.
    8. Nils Herger, 2013. "On Discrete Location Choice Models," Working Papers 13.02, Swiss National Bank, Study Center Gerzensee.
    9. Kramer, Gerald H., 1983. "The Ecological Fallacy Revisited: Aggregate- versus Individual-level Findings on Economics and Elections, and Sociotropic Voting," American Political Science Review, Cambridge University Press, vol. 77(1), pages 92-111, March.
    10. Kelejian, Harry H., 1995. "Aggregated heterogeneous dependent data and the logit model: A suggested approach," Economics Letters, Elsevier, vol. 47(3-4), pages 243-248, March.
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