Evaluation of the Australian Wage Subsidy Special Youth ...

250
(1.75)
Country town before aged 14 -0.47
(3.16)**
Rural area before aged 14 -0.52
(1.97)*
Overseas before aged 14 -0.43
(0.84)
Constant 0.09
(0.15)
Observations 1389
Log likelihood -341.55
LR chi 2 (27) 167 80.04
Mcfadden’s Pseudo R 2 168
0.1029
Akaike Information Criterion 0.53
Robust z-statistics in parentheses* significant at 5%; ** significant at 1%
167 This is the likelihood ratio test of the hypothesis that all coefficients except the intercept are equal to
zero. It is defined as LR = 2 (log likelihood M full – 2 log likelihood M intercept ). The degrees of freedom of this
chi squared distributed statistic are equal to the number of constrained parameters i.e. the number of
coefficients being tested.
168
This measure of fit is also known as the likelihood ratio index. It compares the full model of parameters
(M full ) to a model with just the intercept (M intercept ). It is defined as R 2 = 1 – (log likelihood M full / log
likelihood M intercept ) . The value of Mcfadden’s Pseudo R 2 increases as new variables are added.