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st: large elasticities in the latent class model
Hello,
I would appreciate your comments on the following issue.
When I estimate the latent class model with three classes
or more, the elasticities (both mean and standard
deviation) are extremely large. However, neither the
estimated parameters nor their standard errors are large.
Does it mean that the large elasticities reveal the
problem that is not revealed by the estimated coefficients
are their standard errors? According to the information
criteria, 5 latent class should be chosen and everything
seems fine until the elasticities are estimated. In order
to avoid huge elasticities, I would have to use only two
classes, which is not supported by information criteria.
How would you tackle this problem?
Thanks a lot in advance for your help.
Kind Regards,
Simona
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