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Wednesday, November 2, 2016

Specification Tests for Logit Models Using Gretl

In various earlier posts I've commented on the need for conducting specification tests when working with Logit and Probit models. (For instance, see herehere, and here.) 

One of the seminal references on this topic is Davidson and MacKinnon (1984). On my primary website, you can find a comprehensive list of other related references, together with EViews files that will enable you to conduct various specification tests with LDV  models.

The link for that material is here.

Today I had an email from Artur Tarassow at the University of Hamburg. He wrote:
I know that you're already aware of the open-source econometric software called "Gretl". 
I would like to let you know that I updated my package "LOGIT_HETERO.gfn". This package runs both the tests of homoskedasticity and correct functional form based on your nice program "Logit_hetero.prg" written for EViews.
If you want to have a look at it, simply run:
    set echo off
    set messages off
    install LOGIT_HETERO.gfn
    include LOGIT_HETERO.gfn
    open http://web.uvic.ca/~dgiles/downloads/binary_choice/Logistic_Burr.wf1
    logit Y 0 X1 X2
    matrix M = LOGIT_HETERO(Y,$xlist,$coeff,1)
    print M
Thanks for this, Artur - I'm sure it will be very helpful to many readers of this blog.

Footnote: See Artur's comment below, and the more recent post here. In particular, note Artur's comment: As a note to your blog readers: The two Logit model related packages “logit_burr.gfn” and “LOGIT_HETERO.gfn” are not available any more, as BMST includes both of them.

Reference

Davidson, R. & J. G. MacKinnon, 1984. Convenient specification tests for logit and probit models. Journal of Econometrics, 25, 241 262.

© 2016, David E. Giles