Re: st: Mlogit with factor variables

[Saki Tapsell <sakiuchiyama@gmail.com>]

Hi Maarten,


Sorry for the subsequent questions.

On 22 January 2013 13:23, Maarten Buis <maartenlbuis@gmail.com> wrote:
> On Tue, Jan 22, 2013 at 1:50 PM, Saki Tapsell wrote:
>> I run the multinomial logit model with using y as dependent variable,
>> and sector and firm_size as independent variables.
>>
>> "Sector" is a factor variable (1 = food, 2 = tobacco, 3 = textiles, 4
>> = apparel).
>>
>> I can do:
>>
>> mlogit y ib1.sector firm_size
>>
>> But the tobacco sector has a very small sample, so I don't want to
>> include that but without dropping that data entirely.  So I do:
>>
>> mlogit y i1.sector i3.sector i4.sector  firm_size
>>
>> Which seems to work.  mlogit uses sector == 1   as the base.
>
> That must be incorrect. With that syntax Stata must use sector==2 as
> the base, which is not what you wanted
>

What happens if I have 5 sectors and do not want to include 2 of them now?
Instead of running: mlogit y i.sector firm_size
I run the command: mlogit y i1.sector i4.sector i5.sector
So I am not including sector ==2  and sector ==3.
In this case, Stata reports the results for sector ==4 and sector ==5
but not for sector ==1.
This is why I thought Stata is treating sector==1 as a base category.
Do you disagree?

Thank you very much


>> But now I want to use the command "prchange" which doesn't like factor
>> variables.  So I have to convert this to dummy variables.  But if I
>> do:
>>
>> mlogit y sector1 sector3 sector4 firm_size
>>
>> Then it no longer uses sector1 as the base.  and I think treats them
>> as binary independent variables.
>
> It is equivalent to your previous (wrong) syntax: the base is sector == 2.
>
> You have two options: either you drop all tobacco industries or you
> merge the category tobacco with some other category, probably food.
>
> For the first option type:
>
> drop if sector == 2
>
> or alternatively (better):
>
> gen byte touse = ( sector != 2 )
> mlogit y i.sector firm_size if touse == 1
>
> I often abreviate this as:
> mlogit y i.sector firm_size if touse
>
> For the second option type
> gen sector2 = sector
> replace sector2 = 1 if sector2 == 2
> mlogit y i.sector2 firm_size
>
> Hope this helps,
> Maarten
>
> ---------------------------------
> Maarten L. Buis
> WZB
> Reichpietschufer 50
> 10785 Berlin
> Germany
>
> http://www.maartenbuis.nl
> ---------------------------------
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