Year: 2025
Type: preprint
Abstract: This paper systematically analyzes and reviews identification strategies for binary choice logit models with fixed effects in panel and network data settings. We examine both static and dynamic models with general fixed-effect structures, including individual effects, time trends, and two-way or dyadic effects. A key challenge is the incidental parameter problem, which arises from the increasing number of fixed effects as the sample size grows. We explore two main strategies for eliminating nuisance parameters: conditional likelihood methods, which remove fixed effects by conditioning on sufficient statistics, and moment-based methods, which derive fixed-effect-free moment conditions. We demonstrate how these approaches apply to a variety of models, summarizing key findings from the literature while also presenting new examples and new results.
Source: arXiv (Cornell University)
Authors: Dano, Kevin, Honoré, Bo E., Weidner, Martin
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7075994010
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