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Testing the binomial fixed effects logit model; with an application to female labor supply

Rainer Winkelmann and Lin Xu

No 321, ECON - Working Papers from Department of Economics - University of Zurich

Abstract: Regression models for proportions are frequently encountered in applied work. The conditional expectation function is bounded between 0 and 1 and therefore must be non-linear, requiring nonstandard panel data extensions. One possible approach is the binomial panel logit model with fixed effects (Machado, 2004). We propose a new and simple implementation of the conditional maximum likelihood estimator for standard software. We investigate the properties of the estimator under misspecification and derive a new test for overdispersion. Estimator and test are applied in a study of contracted working volumes, measured as proportion of full-time work, for women in Switzerland.

Keywords: Proportions data; unobserved heterogeneity; conditional maximum likelihood; overdispersion (search for similar items in EconPapers)
JEL-codes: C23 J21 (search for similar items in EconPapers)
Date: 2019-04, Revised 2019-10
New Economics Papers: this item is included in nep-dcm, nep-ecm and nep-lma
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Journal Article: Testing the binomial fixed effects logit model, with an application to female labour supply (2022) Downloads
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