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Binary response and logistic regression in recent accounting research publications: a methodological note

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Abstract

We review 31 articles in leading accounting journals that performed a logistic regression analysis for a binary dependent variable. Our review shows that many of these articles have ambiguities and errors in the presentation of the logistic regression model. We explain that incorrect presentations of the model, even in conjunction with a correct analysis, may lead to a serious misinterpretation of research findings. Two articles are critiqued to demonstrate the reporting problems. Our note is a call for improvement in model presentation and related statistical analysis in the accounting field.

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Notes

  1. We also searched articles published in the Journal of Accounting and Economics (JAE). After applying the screening procedure described in Sect. 3, no JAE article remained for our review.

  2. In this example, \( \ln \left( {\frac{{{\text{odds}}_{1} }}{{{\text{odds}}_{0} }}} \right) = \ln \left[ {\frac{{{{p_{1} } \mathord{\left/ {\vphantom {{p_{1} } {\left( {1 - p_{1} } \right)}}} \right. \kern-\nulldelimiterspace} {\left( {1 - p_{1} } \right)}}}}{{{{p_{0} } \mathord{\left/ {\vphantom {{p_{0} } {\left( {1 - p_{0} } \right)}}} \right. \kern-\nulldelimiterspace} {\left( {1 - p_{0} } \right)}}}}} \right] = 0.10 \). Substituting 0.05 for p 0 in the equation and then solving for p 1 gives p 1 = 0.0550.

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Acknowledgments

We appreciate the helpful comments from Cheng F. Lee (the editor), an anonymous referee, and workshop participants at the 2007 AAA Southeast Regional Meeting held in Atlanta, US. This research is supported in part by a research grant from the Natural Sciences and Engineering Research Council of Canada (Whitmore).

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Authors and Affiliations

  1. Asper School of Business, University of Manitoba, Drake Centre – 181 Freedman Crescent, Winnipeg, MB, R3T 5V4, Canada

    Wenxia Ge

  2. Desautels Faculty of Management, McGill University, 1001 Sherbrooke Street West, Montreal, QC, H3A 1G5, Canada

    G. A. Whitmore

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  1. Wenxia Ge
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Correspondence to Wenxia Ge.

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Ge, W., Whitmore, G.A. Binary response and logistic regression in recent accounting research publications: a methodological note. Rev Quant Finan Acc 34, 81–93 (2010). https://doi.org/10.1007/s11156-009-0123-1

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