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I have five employee-level variables.

Z1 = employee wage

Z2 = employee tenure

Z3 = employee age

Y = employee perception of fairness (ordinal survey item with 5 = very fair... 1 = very unfair)

X = employee job satisfaction (ordinal survey item with 5 = very satisfied...1 = very unsatisfied).

My understanding is that with the two ordinal variables, I perhaps need to use the ordered logistic model. However, I was wondering if using OLS would be incorrect? Furthermore, would it be acceptable to incorporate firm-level fixed effect in the ordered logistic model?

Thank you

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  • $\begingroup$ Is "employee perception of fairness" (Y) the variable you're interested in predicting? If so, Ordinal Logistic Regression is a natural choice of model. $\endgroup$
    – Doctor Milt
    Mar 31 at 2:05

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