Logistic Regression, Average Marginal Effects, and the Linear Probability Model - Part IV: How AMEs are affected by the distribution of omitted variables
In the previous post, we saw that an average marginal effect (AME) of an independent variable in a logistic regression model reflects not only the influence of the variable in focus (i.e., the variable for which the AME is computed), but also the impact of ommitted variables in a model. The perhaps desirable consequence of this is that AMEs change less strongly if an ommitted variable is added to the model (if it is uncorrelated to the variables to the variables already present in the model.)