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Simplified Marginal Effects in Discrete Choice Models

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  • Anderson, Soren T.
  • Newell, Richard G.

Abstract

We show that after a simple normalization of explanatory variables so that they equal zero at some desired reference point, marginal effects for continuous variables in probit and logit models simplify dramatically, becoming a function of only the estimated constant term. We present similar simplifications for computation of the asymptotic variance of marginal effects, as well as for the effects of dummy variables on predicted probabilities. We provide a simple table, which in combination with raw probit or logit estimates, is all one needs to compute the desired effects.

Suggested Citation

  • Anderson, Soren T. & Newell, Richard G., 2003. "Simplified Marginal Effects in Discrete Choice Models," Discussion Papers 10631, Resources for the Future.
    • Handle: RePEc:ags:rffdps:10631
    DOI: 10.22004/ag.econ.10631
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    Cited by:

    1. Carlevaro, Fabrizio & Senegas, Marc-Alexandre, 2006. "Simplified marginal effects in discrete choice models: A correction," Economics Letters, Elsevier, vol. 92(1), pages 44-46, July.
    2. Banerjee, Swagata (Ban) & Martin, Steven W. & Roberts, Roland K. & Larson, James A. & Hogan, Robert J., Jr. & Johnson, Jason L. & Paxton, Kenneth W. & Reeves, Jeanne M., 2007. "Adoption of Conservation-Tillage Practices in Cotton Production," 2007 Annual Meeting, February 4-7, 2007, Mobile, Alabama 34842, Southern Agricultural Economics Association.
    3. Lijia Wang & Jianhua Wang & Xuexi Huo, 2019. "Consumer’s Willingness to Pay a Premium for Organic Fruits in China: A Double-Hurdle Analysis," IJERPH, MDPI, vol. 16(1), pages 1-14, January.
    4. Yin‐Wong Cheung & Shi He, 2022. "RMB misalignment: What does a meta‐analysis tell us?," Review of International Economics, Wiley Blackwell, vol. 30(4), pages 1038-1086, September.
    5. Melody L. Hyppolite, 2017. "Understanding Child Outcomes within a Multiple Risk Model: Examining Parental Incarceration," Social Sciences, MDPI, vol. 6(3), pages 1-21, July.
    6. Stefano Battilossi, 2009. "Did governance fail universal banks? Moral hazard, risk taking, and banking crises in interwar Italy1," Economic History Review, Economic History Society, vol. 62(s1), pages 101-134, August.
    7. Webber, Don J. & Freke, Martin, 2006. "Church organists: Analysing their willingness to play," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 35(5), pages 854-867, October.
    8. Anderson, Soren T. & Newell, Richard G., 2004. "Information programs for technology adoption: the case of energy-efficiency audits," Resource and Energy Economics, Elsevier, vol. 26(1), pages 27-50, March.
    9. Francesco Grigoli & Giacomo Sbrana, 2013. "Determinants And Dynamics Of Schooling And Child Labour In Bolivia," Bulletin of Economic Research, Wiley Blackwell, vol. 65, pages 17-37, May.
    10. Gechert, Sebastian & Mey, Bianka & Opatrny, Matej & Havranek, Tomas & Stanley, T. D. & Bom, Pedro R. D. & Doucouliagos, Hristos & Heimberger, Philipp & Irsova, Zuzana & Rachinger, Heiko J., 2023. "Conventional Wisdom, Meta-Analysis, and Research Revision in Economics," EconStor Preprints 280745, ZBW - Leibniz Information Centre for Economics.
    11. Goic, Marcel & Rojas, Andrea & Saavedra, Ignacio, 2021. "The Effectiveness of Triggered Email Marketing in Addressing Browse Abandonments," Journal of Interactive Marketing, Elsevier, vol. 55(C), pages 118-145.
    12. Pambo, Kennedy O. & Okello, Julius J. & Mbeche, Robert & Kinyuru, John N., 2016. "Consumer Acceptance of Edible Insects for Non-Meat Protein in Western Kenya," 2016 Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 246317, African Association of Agricultural Economists (AAAE).
    13. Sanjib Bhuyan, 2007. "The “People” Factor in Cooperatives: An Analysis of Members' Attitudes and Behavior," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 55(3), pages 275-298, September.
    14. Chuang-yi Chiu & Jennjou Chen, 2013. "Determinants of Labor Force Participation of Older Married Men in Taiwan," Economics Bulletin, AccessEcon, vol. 33(4), pages 3088-3101.
    15. Grammenos, Costas Th. & Papapostolou, Nikos C., 2012. "US shipping initial public offerings: Do prospectus and market information matter?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(1), pages 276-295.
    16. Minghui Yin & Balekouzou Augustin & Chang Shu & Tingting Qin & Ping Yin, 2016. "Probit Models to Investigate Prevalence of Total Diagnosed and Undiagnosed Diabetes among Aged 45 Years or Older Adults in China," PLOS ONE, Public Library of Science, vol. 11(10), pages 1-13, October.
    17. Elias Katsikas & Theologos Dergiades, 2012. "Revising higher education policy in Greece: filling the Danaids’ Jar," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 39(3), pages 279-292, August.
    18. Liu, Lu, 2014. "Extreme downside risk spillover from the United States and Japan to Asia-Pacific stock markets," International Review of Financial Analysis, Elsevier, vol. 33(C), pages 39-48.
    19. Michael N.A. Mensah & Adusei Jumah, 2021. "Electronic Money and Consumer Spending Behaviour: Evidence from Ghana," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 11(3), pages 1-6.
    20. Wang, L., 2018. "Willingness to Pay for Certified Fresh Fruits in China: A Double-Hurdle Approach," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277413, International Association of Agricultural Economists.
    21. Pambo, Kennedy Otieno & Otieno, David Jakinda & Okello, Julius Juma, 2014. "Prospects for Biofortification Reducing Micronutrient Deficiency in Kenya: Lessons from Sugar Fortification Programmes," 18th ICABR Conference, June 17-20, 2014, Nairobi, Kenya 174531, International Consortium on Applied Bioeconomy Research (ICABR).
    22. Joonmo Cho & Jaeseong Lee & Taehee Kwon, 2013. "Gender exclusion in social security protection: evidence from Korea," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 27(1), pages 62-78, May.
    23. Elias Katsikas & Theologos Dergiades, 2009. "Higher Education Policy in Greece: Filling the Danaids' Jar," Discussion Paper Series 2009_16, Department of Economics, University of Macedonia, revised Nov 2009.
    24. Eberechukwu Onukwugha & Jason Bergtold & Rahul Jain, 2015. "A Primer on Marginal Effects—Part I: Theory and Formulae," PharmacoEconomics, Springer, vol. 33(1), pages 25-30, January.

    More about this item

    Keywords

    Research Methods/ Statistical Methods;

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access

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