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Marginal and interaction effects in ordered response models

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  • Mallick, Debdulal

Abstract

In discrete choice models the marginal effect of a variable of interest that is interacted with another variable differs from the marginal effect of a variable that is not interacted with any variable. The magnitude of the interaction effect is also not equal to the marginal effect of the interaction term. I present consistent estimators of both marginal and interaction effects in ordered response models. This procedure is general and can easily be extended to other discrete choice models.

Suggested Citation

  • Mallick, Debdulal, 2008. "Marginal and interaction effects in ordered response models," Working Papers eco_2008_13, Deakin University, Department of Economics.
    • Handle: RePEc:dkn:econwp:eco_2008_13
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    References listed on IDEAS

    as
    1. Stefan Boes & Rainer Winkelmann, 2006. "Ordered Response Models," Springer Books, in: Olaf Hübler & Jachim Frohn (ed.), Modern Econometric Analysis, chapter 12, pages 167-181, Springer.
    2. Spanos,Aris, 1999. "Probability Theory and Statistical Inference," Cambridge Books, Cambridge University Press, number 9780521424080.
    3. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
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    Cited by:

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    4. Alam Asadov, 2024. "Empirical Analysis of Demand for Sukuk in Uzbekistan," Economies, MDPI, vol. 12(8), pages 1-26, August.
    5. Lan, Jing & Munro, Alistair, 2013. "Environmental compliance and human capital: Evidence from Chinese industrial firms," Resource and Energy Economics, Elsevier, vol. 35(4), pages 534-557.

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    More about this item

    Keywords

    Marginal effect; interaction effect; ordered probit;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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