Keep it simple: estimation strategies for ordered response models with fixed effects |
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| Authors: | Maximilian Riedl Ingo Geishecker |
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| Institution: | 1. Faculty of Economic Sciences, Georg-August-Universit?t G?ttingen, G?ttingen, Germanymaximilian.riedl@wiwi.uni-goettingen.de;3. Faculty of Business Administration and Economics, European University Viadrina, Frankfurt (Oder), Germany |
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| Abstract: | By running Monte Carlo simulations, we compare different estimation strategies of ordered response models in the presence of non-random unobserved heterogeneity. We find that very simple binary recoding schemes deliver parameter estimates with very low bias and high efficiency. Furthermore, if the researcher is interested in the relative size of parameters the simple linear fixed effects model is the method of choice. |
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| Keywords: | fixed effects ordered logit ordered responses finite sample properties Monte Carlo simulation happiness |
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