Comparing linear probability model coefficients across groups

Anders Holm (), Mette Ejrnæs and Kristian Karlson

Quality & Quantity: International Journal of Methodology, 2015, vol. 49, issue 5, 1823-1834

Abstract: This article offers a formal identification analysis of the problem in comparing coefficients from linear probability models (LPM) between groups. We show that differences in coefficients from these models can result not only from genuine differences in effects, but also from differences in one or more of the following three components: outcome truncation, scale parameters and distributional shape of the predictor variable. These results point to limitations in using LPM coefficients for group comparisons. We also provide Monte Carlo simulations and real examples to illustrate these limitations, and we suggest a restricted approach to using LPM coefficients in-group comparisons. Copyright Springer Science+Business Media Dordrecht 2015

Keywords: Group differences; Interaction terms; Linear probability model; Logit; Probit (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s11135-014-0057-0

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