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Predicting Probabilities: Inherent and Sampling Variability in the Estimation of Discrete-Choice Model

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  • Gordon, D.V.
  • Lin, Z.
  • Osberg, L.
  • Phipps, S.

Abstract

In this paper, we address two issues: the small sample variability in estimation of the parameters of female labor force participation models with dichotomous dependent variables due to random variation across small samples; and whether large-sample estimates of discrete-choice models yield the same results. In the first case, both logit and profit models exhibit similar patterns of parameter instability in 'small' samples and that a sample size of over 10,000 observations is required to reduce the issue of sampling variability to acceptable levels. In the second case, both models generate similar qualitative results in large samples; however, even in the largest samples, the quantitative results generated by these models diverge significantly. Coauthors are Zhengxi Lin, Lars Osberg, and Shelley Phipps. Copyright 1994 by Blackwell Publishing Ltd
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Suggested Citation

  • Gordon, D.V. & Lin, Z. & Osberg, L. & Phipps, S., 1992. "Predicting Probabilities: Inherent and Sampling Variability in the Estimation of Discrete-Choice Model," Papers 136, Calgary - Department of Economics.
    • Handle: RePEc:fth:calgar:136
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    Cited by:

    1. Irfan Kanat & Yili Hong & T. S. Raghu, 2018. "Surviving in Global Online Labor Markets for IT Services: A Geo-Economic Analysis," Information Systems Research, INFORMS, vol. 29(4), pages 893-909, December.
    2. Mkhabela, T.S., 2002. "Determinants Of Manure Use By Small-Scale Crop Farmers In The Kwazulu-Natal Province: A Logit Analysis," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 41(1).
    3. Ramkumar Janakiraman & Eunho Park & Emre M. Demirezen & Subodha Kumar, 2023. "The Effects of Health Information Exchange Access on Healthcare Quality and Efficiency: An Empirical Investigation," Management Science, INFORMS, vol. 69(2), pages 791-811, February.
    4. Daniel Gordon & Lars Osberg & Shelley Phipps, 2005. "Sampling variability: some observations from a labour supply equation," Applied Economics, Taylor & Francis Journals, vol. 37(18), pages 2167-2175.
    5. Anim, F. D. K. & van Schalkwyk, H. D., 1996. "Tenure Arrangements And Access To Credit:The Case Of Small-Scale Farmers In The Northern Province," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 35(4), December.

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    Keywords

    labour market ; economic models;

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