Bias in Conditional and Unconditional Fixed Effects Logit Estimation: A Correction

In a recent paper published in this journal, Katz (2001) compares the bias in conditional and unconditional fixed effects logit estimation using Monte Carlo Simulation. This note shows that while Katz's (2001) specification has “wrong” fixed effects (in the sense that the fixed effects are the same for all individuals), his conclusions still hold if I correct his specification (so that the fixed effects do differ over individuals). This note also illustrates the danger, when using logit, of including dummies when no fixed effects are present.