My question is about the number of cutpoints identified in an ordered
probit model with J potential outcomes. According to the manual,
Stata's -ologit- and -oprobit- commands identify J-1 cutpoints.
To take the example [R] ologit: suppose that a car can have 5
categories of repair records, from Poor to Excellent. In this
example, -ologit- estimates 4 cutpoints, where /cut1=-2.77. The
manual states that "For domestic cars, the probability of a poor
record is the probability that u-j<-2.77.
My question is why oprobit identifies /cut1 at all, rather than
normalizing it to zero as certain other statistical packages (such as
Limdep) do. My understanding is that the ordered probit/logit is
identified by the relative lengths of the intervals--the cutpoints
themselves have no meaning. And since the length of the interval
between infinity and the first cutpoint is always infinite, why is
this first cutpoint identified at all?
Thanks in advance,
Rachel
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