Simplified Marginal Effects in Discrete Choice Models

We show that after a simple normalization of explanatory variables so that they equal zero at some desired reference point, marginal effects for continuous variables in probit and logit models simplify dramatically, becoming a function of only the estimated constant term. We present similar simplifications for computation of the asymptotic variance of marginal effects, as well as for the effects of dummy variables on predicted probabilities. We provide a simple table, which in combination with raw probit or logit estimates, is all one needs to compute the desired effects.


Issue Date:
2003
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/10631
Total Pages:
12
JEL Codes:
C25; C51; C81
Series Statement:
Discussion Paper 03-38




 Record created 2017-04-01, last modified 2017-08-23

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