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  • Interpreting Odds Ratios

    I need advice on the correct interpretation of an odds ratio of an interaction term.

    Both the mixed-effect logistic regression output is below as well as the predicted odds values, which I calculate merely to help me visualize what the OR values in the output are referring to.

    The dependent variable is whether a household owned a television. We are interested in the effects of household head gender (Female, Male), wealth status (Poor, Middle, Rich), and the interaction between these variables. This is hypothetical given the confidentiality of the dataset I'm working with. I've also excluded other predictors here to shorten the length of the post.

    The base levels are set to Male and Rich. As we can see in the predicted odds values table below, the odds of Female#Rich owning a TV is 7.2; the odds of Male#Rich is 2.0. This is represented in the regression output under Female (OR: 3.58). Given gender is one component of the interaction term, it no longer represents the unique effects of head-gender, and is interpreted in relation to the base level for wealth (i.e., Rich). We can do the same for Female#Poor (OV: 3.99) and Male#Poor (OV: 4.2) [OR: 0.95, omitted from the regression ouput] and Female#Middle (OV: 2.8) and Male#Middle (OV: 2.6) [OR: 1.048, ommitted]. In both cases, the OR is much closer to 1 than at the rich level (3.58).

    The regression output lists the OR in the interaction for Female#Poor and Female#Medium as 0.27 and 0.29, respectively.

    Conceptually, it indicates the difference in the odds between female and males in owning a TV is much smaller at poor and middle wealth levels, compared to a rich level (where we know the gendered difference is much larger). I'm looking for help on how to interpret this in numerical terms. I had originally thought of writing the difference in the odds of owning a TV between male and female heads is 70% smaller at middle-class level, as compared to a rich level -- however, I don't think that intuition is right.

    Code:
                        TV_owner   | Odds Ratio   Std. Err.      z    P>|z|     [95% Conf. Interval]
    -------------------------------+----------------------------------------------------------------
                      hhead_gender |
                           Female  |   3.577116   1.585295     2.88   0.004     1.500722      8.5264
                                   |
                 Status_Ladder_Cat |
                            Poor   |   2.092556   .5473432     2.82   0.005      1.25323    3.494002
                           Middle  |   1.309231   .3067593     1.15   0.250     .8271336    2.072321
                                   |
    hhead_gender#Status_Ladder_Cat |
                       Female#Poor |   .2661135   .1304397    -2.70   0.007      .101821    .6954992
                    Female#Middle  |   .2930256   .1347962    -2.67   0.008     .1189433    .7218902
    The predicted odds values are here:

    Code:
                                   |     Margin   Std. Err.      z    P>|z|     [95% Conf. Interval]
    -------------------------------+----------------------------------------------------------------
                      hhead_gender |
                           Female  |    3.57335    1.00732     3.55   0.000     1.599038    5.547662
                             Male  |   3.040049   .8109692     3.75   0.000     1.450579     4.62952
                                   |
                 Status_Ladder_Cat |
                             Rich  |   3.936832   1.453617     2.71   0.007     1.087794     6.78587
                              Poor |   4.122344   1.165546     3.54   0.000     1.837915    6.406773
                           Middle  |   2.673619   .6924266     3.86   0.000     1.316488     4.03075
                                   |
    hhead_gender#Status_Ladder_Cat |
                      Female#Rich  |   7.175792   3.313105     2.17   0.030     .6822246    13.66936
                       Female#Poor |   3.995892   1.269603     3.15   0.002     1.507515    6.484269
                    Female#Middle  |   2.752908   .7712539     3.57   0.000     1.241278    4.264538
                        Male#Rich  |   2.006027   .6562206     3.06   0.002     .7198586    3.292196
                         Male#Poor |   4.197724   1.252428     3.35   0.001     1.743011    6.652437
                      Male#Middle  |   2.626354   .7001336     3.75   0.000     1.254117     3.99859
    Last edited by Sameer Hattiangdi; 23 May 2020, 18:21.

  • #2
    I'm going to say something that you'll probably think is not very constructive. My advice is: do not use odds ratios to summarise estimates, especially when your logit model contains interactions. I have strong sympathies with the arguments made by Edward Norton, 'Log odds and ends', NBER Working Paper 18252, https://www.nber.org/papers/w18252. More constructively, my advice would be to summarise the implications of your model estimates by comparing predicted probabilities, average partial effects, etc. See -margins- etc., linked from the logit post-estimation help.

    (Maarten Buis's view differs from mine. He may well chime in. Search Statalist archives for previous correspondence on this and related issues.)

    Comment


    • #3
      Thanks very much, Stephen.

      While still interested in the interpretation posed above, I agree with your approach to using predicted probabilities and have generated these estimates for my work. One additional question on this matter, which could be a new topic, but I'll ask it here to follow-on from our conversation on predicted probabilities.

      We can calculate probabilities by [odds value / (odds value +1)]. In Stata, using the asobserved default function, my predicted probabilities differ substantially from the predicted odds values (in Tables below). For example, following the simple calculation above, Male#Rich should be ~ 67%, though it's predicted probability, as calculated by margins, is ~ 57% (Table 2). This is because Stata is calculating the predictions based on the observed values for the other variables included in our original logistic model, right?

      Table 1: Predicted odds values
      Code:
      . margins i.hhead_gender##i.wealth_status, expression(exp(xb())) post
      
      Predictive margins                              Number of obs     =      1,839
      Model VCE    : OIM
      
      Expression   : exp(xb())
      
      ------------------------------------------------------------------------------------------------
                                     |            Delta-method
                                     |     Margin   Std. Err.      z    P>|z|     [95% Conf. Interval]
      -------------------------------+----------------------------------------------------------------
                        hhead_gender |
                             Female  |    3.57335    1.00732     3.55   0.000     1.599038    5.547662
                               Male  |   3.040049   .8109692     3.75   0.000     1.450579     4.62952
                                     |
                   Status_Ladder_Cat |
                               Rich  |   3.936832   1.453617     2.71   0.007     1.087794     6.78587
                               Poor  |   4.122344   1.165546     3.54   0.000     1.837915    6.406773
                             Middle  |   2.673619   .6924266     3.86   0.000     1.316488     4.03075
                                     |
      hhead_gender#Status_Ladder_Cat |
                        Female#Rich  |   7.175792   3.313105     2.17   0.030     .6822246    13.66936
                        Female#Poor  |   3.995892   1.269603     3.15   0.002     1.507515    6.484269
                      Female#Middle  |   2.752908   .7712539     3.57   0.000     1.241278    4.264538
                          Male#Rich  |   2.006027   .6562206     3.06   0.002     .7198586    3.292196
                          Male#Poor  |   4.197724   1.252428     3.35   0.001     1.743011    6.652437
                        Male#Middle  |   2.626354   .7001336     3.75   0.000     1.254117     3.99859
      Table 2: Predicted probabilities (as observed)
      Code:
      . margins i.hhead_gender##i.Status_Ladder_Cat, asobserved
      
      Predictive margins                              Number of obs     =      1,839
      Model VCE    : OIM
      
      Expression   : Marginal predicted mean, predict()
      
      ------------------------------------------------------------------------------------------------
                                     |            Delta-method
                                     |     Margin   Std. Err.      z    P>|z|     [95% Conf. Interval]
      -------------------------------+----------------------------------------------------------------
                        hhead_gender |
                             Female  |   .6610958    .040389    16.37   0.000     .5819347    .7402569
                               Male  |    .638277   .0394395    16.18   0.000     .5609769    .7155771
                                     |
                   Status_Ladder_Cat |
                               Rich  |   .6431545   .0460534    13.97   0.000     .5528915    .7334175
                               Poor  |   .6943125   .0384431    18.06   0.000     .6189654    .7696596
                             Middle  |   .6236234   .0404316    15.42   0.000      .544379    .7028678
                                     |
      hhead_gender#Status_Ladder_Cat |
                        Female#Rich  |   .7707456   .0545213    14.14   0.000     .6638859    .8776053
                       Female#Poor   |   .6894487   .0451419    15.27   0.000     .6009722    .7779253
                      Female#Middle  |   .6288142   .0444877    14.13   0.000     .5416199    .7160085
                          Male#Rich  |   .5728803   .0564826    10.14   0.000     .4621764    .6835842
                         Male#Poor   |   .6969767   .0405996    17.17   0.000      .617403    .7765505
                        Male#Middle  |   .6207272   .0418548    14.83   0.000     .5386932    .7027612

      Comment


      • #4
        I'm going to ignore Table 1 altogether. I have no interest in odds ratios (as I said earlier) and so don't want to try and look to see if there is a (non)correspondence across your 2 tables. But, yes, as you suggest, calculating quantities using -margins- can lead to different outputs depending on what the RHS values of covariates are set at.

        I suggest that you back up and reflect on what it is that you're trying to do here. Your first message referred to fitting a "mixed effect logit" model, and yet you only showed us an extract from the output table -- focusing on the coefficient estimates. (What's not shown is the header to the regression table, or the information about random effects.) Why I am mentioning this is that predicted probabilities from a mixed logit model can be of 2 types depending on whether you are taking a marginal model perspective or a population -averaged model perspective. (Standard texts explain the difference. There's probably stuff in the Stata reference manuals too; I haven't looked recently.) This is a separate issue from decisions about what values you're going to set the RHS 'fixed effect' predictors at.

        Comment

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