With the advent of improved data collection techniques, the applied econometrician can nowadays have access to very large data bases. Sometimes, however, these can have fairly low informational content. For example, a typical response rate in direct mailings is below 1%. Given the small fraction...

When customers are classified into ordered categories, which are defined from the outset, it may happen that the majority belongs to a single category. If a market researcher is interested in the correlation between the classification and individual characteristics, the natural question is...

We show that there is no formal statistical testing method to combine categories in a standard ordered regression model. We discuss practical implications of this result.