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

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  • Rainer Winkelmann

    (University of Zurich)

  • Lin Xu

    (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 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.

Suggested Citation

  • Rainer Winkelmann & Lin Xu, 2022. "Testing the binomial fixed effects logit model, with an application to female labour supply," Empirical Economics, Springer, vol. 62(2), pages 679-708, February.
    • Handle: RePEc:spr:empeco:v:62:y:2022:i:2:d:10.1007_s00181-021-02034-2
    DOI: 10.1007/s00181-021-02034-2
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    References listed on IDEAS

    as
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    2. Pagan,Adrian & Ullah,Aman, 1999. "Nonparametric Econometrics," Cambridge Books, Cambridge University Press, number 9780521355643, September.
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    4. Kunz, J.S.; & Staub, K.E.; & Winkelmann, R.;, 2018. "Predicting fixed effects in panel probit models," Health, Econometrics and Data Group (HEDG) Working Papers 18/23, HEDG, c/o Department of Economics, University of York.
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    7. Steinhauer, Andreas, 2018. "Working Moms, Childlessness, and Female Identity," CEPR Discussion Papers 12929, C.E.P.R. Discussion Papers.
    8. Andreas Steinhauer, 2018. "Working Moms, Childlessness, and Female Identity," Working Papers hal-03475468, HAL.
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    More about this item

    Keywords

    Proportions data; Unobserved heterogeneity; Conditional maximum likelihood; Overdispersion;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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