Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/142554
Authors: 
Mallick, Debdulal
Year of Publication: 
2009
Series/Report no.: 
EERI Research Paper Series 22/2009
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. I also provide an example using household survey data on food security in Bangladesh. Results show that marginal effects of interaction terms are estimated by standard statistical software (STATA® 10) with very large error and even with wrong sign.
Subjects: 
Marginal effect
interaction effect
ordered probit
discrete choice
JEL: 
C12
C25
Document Type: 
Working Paper

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