where i-1, , N denotes household and J 1, ,J denotes heat systems. ai is the dum
ID: 3316386 • Letter: W
Question
where i-1, , N denotes household and J 1, ,J denotes heat systems. ai is the dummy variable of alternative j and income is the income of household i. We estimate the model by setting "heat pump as the base. mlogit(depvar" ic+oc lincome, H, reflevel 'hp') > m . = summary () Call: nlogit(formula-depvar- ic + oc income, data-H, reflevel = "hp", method- "nr", print,level - O) Frequencies of alternatives: hp ec er gc gr 0.055556 0.071111 0.093333 0.636667 0.143333 nr method 6 iterations, Oh:Om:0s g, (-H)"-1g = 6.27E-06 successive function values within tolerance limits
Explanation / Answer
Decision rule : If p value is smaller then that variable is more fovourable
Base on the above rule, the followng is the explanation
=> p value for ic = 0.0136
=> p value for oc = 0.00000749
if we observe this, p value for oc variable < p value of 'ic' variable
so oc is more significant and strong relation with income
comparing with oc, ic variable is less significant
Hence OC variable is more favourable and IC variable is less fovourable
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