Testing for Independence of Irrelevant Alternatives: Some Empirical Results

Tim R. L. Fry and Mark N. Harris

No 267431, Department of Econometrics and Business Statistics Working Papers from Monash University, Department of Econometrics and Business Statistics

Abstract: We estimate a multinomial Logit (MNL) model of U.K. Magistrates' Courts sentencing using a data set collected by the National Association for the Care and Resettlement of Offenders (NACRO) and test the independence of irrelevant alternatives (IIA) property using six tests. Conducting the tests with the appropriate asymptotic critical values we find that the acceptance or rejection of IIA depends both upon which test and which variant of a given test is used. The same tests are then performed using empirical critical values obtained by simulation and the resultant inferences compared. Our results show that empirical workers should exercise care when testing for IIA.

Keywords: Research and Development/Tech Change/Emerging Technologies; Research Methods/Statistical Methods (search for similar items in EconPapers)
Pages: 21
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Persistent link: https://EconPapers.repec.org/RePEc:ags:monebs:267431

DOI: 10.22004/ag.econ.267431

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