Econometric Methods for Fractional Response Variables with an Application to 401(K) Plan Participation Rates

28 Pages Posted: 24 Jul 2000

See all articles by Leslie E. Papke

Leslie E. Papke

Michigan State University - Department of Economics; National Bureau of Economic Research (NBER)

Jeff Wooldridge

Michigan State University - Department of Economics

Date Written: November 1993

Abstract

We offer simple quasi-likelihood methods for estimating regression models with a fractional dependent variable and for performing asymptotically valid inference. Compared with log-odds type procedures, there is no difficulty in recovering the regression function for the fractional variable, and there is no need to use ad hoc transformations to handle data at the extreme values of zero and one. We also offer some new, simple specification tests by nesting the logit or probit function in a more general functional form. We apply these methods to a data set of employee participation rates in 401(k) pension plans.

Suggested Citation

Papke, Leslie E. and Wooldridge, Jeffrey M., Econometric Methods for Fractional Response Variables with an Application to 401(K) Plan Participation Rates (November 1993). NBER Working Paper No. t0147. Available at SSRN: https://ssrn.com/abstract=225108

Leslie E. Papke (Contact Author)

Michigan State University - Department of Economics ( email )

East Lansing, MI 48824
United States
517-355-3773 (Phone)
517-432-1068 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Jeffrey M. Wooldridge

Michigan State University - Department of Economics ( email )

#211 Marshall Hall
East Lansing, MI 48824-1038
United States
517+353-5972 (Phone)

Register to save articles to
your library

Register

Paper statistics

Downloads
112
rank
239,700
Abstract Views
2,141
PlumX Metrics