Specification Error in Multinomial Logit Models: Analysis of the Omitted Variable Bias

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Specification Error in Multinomial Logit Models: Analysis of the Omitted Variable Bias

Published Date

1980-05

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Center for Economic Research, Department of Economics, University of Minnesota

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Working Paper

Abstract

In this article, we analyze the omitted variable bias problem in the multinomial logistic probability model. Sufficient, as well as necessary, conditions under which the omitted variable will not create biased coefficient estimates for the included variables are derived. Conditional on the response variable, if the omitted explanatory and the included explanatory variable are independent, the bias will not occur. Bias will occur if the omitted relevant variable is independent with the included explanatory variable. The coefficient of the included variable plays an important role in the direction of the bias.

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Previously Published Citation

Lee, L., (1980), "Specification Error in Multinomial Logit Models: Analysis of the Omitted Variable Bias", Discussion Paper No. 131, Center for Economic Research, Department of Economics, University of Minnesota.

Suggested citation

Lee, Lung-Fei. (1980). Specification Error in Multinomial Logit Models: Analysis of the Omitted Variable Bias. Retrieved from the University Digital Conservancy, https://hdl.handle.net/11299/55036.

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