Abstract
Qualitative choice models are now widely used in economics. However, widely accepted measures evaluating the goodness of fit, predictive quality, or overall-success of such models do not exist, although many approaches have been suggested. Some measures are based on the likelihood-ratio test statistic, while others evaluate the residuals of the qualitative choice regressions, or use prediction-realization tables for analysis. Some measures are discussed in Amemiya (1981), Maddala (1983), Aldrich and Nelson (1984), Judge, Griffiths, Hill, Lütkepohl and Lee (1985) and Greene (1990), but these reviews are far from being complete.
A research draft on methods for the binary probit model covered by this paper was given at the First Munich Applied Econometrics Workshop in July 1989. This paper is an extended and completely revised version of it. I wish to thank Gerhard Arminger, Gebhard Flaig and François Laisney for many useful comments, John De New for excellent research assistance, and the German Science Foundation (DFG) for financial support. The paper was completed when I was visiting CentER, Tilburg University, in April 1990.
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Zimmermann, K.F. (1993). Goodness of Fit in Qualitative Choice Models: Review and Evaluation. In: Schneeweiß, H., Zimmermann, K.F. (eds) Studies in Applied Econometrics. Contributions to Economics. Physica-Verlag HD. https://doi.org/10.1007/978-3-642-51514-9_3
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DOI: https://doi.org/10.1007/978-3-642-51514-9_3
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