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A new command for estimating fixed effects ordered logit models
Abstract.
This research describes how to estimate panel data ordered logit models with fixed effects using the new community-contributed Stata command feologit. Fixed effects models are increasingly popular for estimating causal effects in the social sciences, since they control for unobserved time invariant heterogeneity in a flexible way. The ordered logit model is the standard model for ordered dependent variables and this command is the first in Stata specifically for this model with fixed effects. The command includes a choice between two estimators, the BUC estimator introduced in Baetschmann, Staub, and Winkelmann [2015] and the BUC-τ estimator in Baetschmann (2012). Baetschmann et al. (2015) showed that the BUC estimator has good properties and is almost as efficient as more complex estimators such as generalized method-of-moments and empirical likelihood estimators. The command and model interpretations are illustrated with an analysis of the effect of parenthood on life satisfaction using data from the German Socio-Economic Panel.
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