Re: st: conditional logit (clogit) where number of choices=numberof dummy indicators

[Partha Deb <partha.deb@hunter.cuny.edu>]

John,

With c choices, there are (c-1) "independent" probabilities.  The probability 
of the c-th choice simply makes the probabilities sum to 1.  Hence only c-1 
intercepts can be estimated.

HTH

Partha

John Fulton wrote:

> Hi.  I am running a clogit as McFadden's choice model with c choices,1  
> record per choice within each chooser's "group."  I  created c dummies 
> to interact with characterisics of choosers, but stata always drops one 
> dummy due to collinearity.
> My question is: what exactly is the cause of collinearity here?
>
> My guess is that the c choices just also happens to be equal to the 
> number of records within each group, so that it is more a matter of 
> degrees of freedom than it is collinearity.  That is, once stata has 
> considered c-1 choices, the cth choice - and it always is the last one - 
> is determined.
>
> This is somewhat confusing because standard practice in ols regressions 
> without intercepts is to include dummies for all c categories of an 
> indicator, rather than the more typical case of c-1 dummies in 
> regressions with intercepts.  Since conditional logit intercepts drop 
> out, I thought c dummies would be called for.
>
> What do you think?
> Thanks,
> John.
>
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--
Partha Deb
Department of Economics
Hunter College
ph:  (212) 772-5435
fax: (212) 772-5398
http://urban.hunter.cuny.edu/~deb/

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