Question

4. Which of these is an advantage of probits over linear probability models? A. The coefficients...

4. Which of these is an advantage of probits over linear probability models?

A. The coefficients are easier to interpret.
B. You can only get predictions between 0 and 1.
C. They give you causal evidence, not just associations.
D. None of the above.

why

Homework Answers

Answer #1

One of the major disadvantage of Linear Probability model is its Unbounded Probability. The most basic probability law states that the probability of an event occurring must be contained within the interval [0,1]. But this basic law of probability is not satisfied by the Linear Probability Model always. Although most of the predicted probabilities from an LPM have sensible values (between 0 and 1), some predicted probabilities may have nonsensical values that are less than 0 or greater than 1.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The advantage of using the probit model versus the linear probability model for estimating regressions for...
The advantage of using the probit model versus the linear probability model for estimating regressions for binary dependent variables is: A. probit model yields more precise estimates (i.e. lower standard errors of the estimated coefficients) B. regression coefficients in the probit model are easier to interpret C. probit model yields predicted probabilities that lie between 0 and 1 D. all of the above
A car delearship sells only 5 models of cars. Over time, they have identified the probability...
A car delearship sells only 5 models of cars. Over time, they have identified the probability of a customer buying a car. They only sell for the sticker price, no negotiating. . The probability distribution for the purchases of customers visiting the dealership is given below. Model A B C D E No Sale Price $20,000 $22,000 $25,000 $30,000 $40,000 $0 Probability 0.04 0.07 0.11 0.03 0.02 0 .73 a) (3 pts) Make a probability distribution for a worker’s comission,...
Which of the following is not an advantage of content analysis? a)Content analysis can be conducted...
Which of the following is not an advantage of content analysis? a)Content analysis can be conducted with a relatively small expenditure of time, money, and person power. b)Content analysis doesnt require that you get everything right the first time. c)Content analysis is unobtrusive. d)Content analysis is applicable only to recorded communication. none of these.
Time series are particularly useful to track variables such as revenues, costs, and profits over time....
Time series are particularly useful to track variables such as revenues, costs, and profits over time. Time series models help evaluate performance and make predictions. Consider the following and respond in a minimum of 175 words: Time series decomposition seeks to separate the time series (Y) into 4 components: trend (T), cycle (C), seasonal (S), and irregular (I). What is the difference between these components? The model can be additive or multiplicative.When we do use an additive model? When do...
Time series are particularly useful to track variables such as revenues, costs, and profits over time....
Time series are particularly useful to track variables such as revenues, costs, and profits over time. Time series models help evaluate performance and make predictions. Consider the following and respond in a minimum of 175 words: Time series decomposition seeks to separate the time series (Y) into 4 components: trend (T), cycle (C), seasonal (S), and irregular (I). What is the difference between these components? The model can be additive or multiplicative.When we do use an additive model? When do...
ANSWER ALL QUESTIONS 1. Which of the following is considered to be an advantage of the...
ANSWER ALL QUESTIONS 1. Which of the following is considered to be an advantage of the 401k plan, according to the textbook? a. minimal expense to the employer b. no annual contribution required c. owner employees MAY contribute d. all of the above 2. Which of the following business types are allowed to establish a 401k? a. LLCs b. C-Corporations c. Sole Proprietors d. All of the above 3. What amount of an employee's wage is subject to Medicare Tax?...
What distribution best models each situation? (No actual work, just which distribution best models the problem)...
What distribution best models each situation? (No actual work, just which distribution best models the problem) A. According to the Daily Racing Form, the probability is about 0.67 that the favorite in a horse race will finish in the money (first, second or third place). Suppose that you always bet the favorite “across the board”, which means that you win something if the favorite finishes in the money. What probability distribution describes the number of races that you bet until...
choose correct answer and explain why its true or how you get it? 1/A discrete probability...
choose correct answer and explain why its true or how you get it? 1/A discrete probability distribution: a/ assigns a probability to each possible value of the random variable. b/ can assume values between -1 and +1. c/ is a listing of all possible values of the random variable. d/is independent of the parameters of the distribution 2/ The probability that event A occurs, given that event B has occurred, is an example of: a/ a marginal probability. b/ more...
A math teacher, wanting to assess students 'knowledge, put in a competition in which students' performance...
A math teacher, wanting to assess students 'knowledge, put in a competition in which students' performance averaged 65 (with an excellent 100) and a standard deviation of 10 units. Let's consider that the distribution of performance is normal: A. Find the probability that the performance of a randomly selected student is over 75. B. If we consider that the random variable that describes student performance is continuous (that is, it can take any real value between 0 and 100 and...
1.A firm hires labor up to the point where the Question 19 options: 1) real wage...
1.A firm hires labor up to the point where the Question 19 options: 1) real wage rate equals the nominal wage rate. 2) additional hour of labor produces extra output that equals the real wage rate. 3) additional hour of labor produces extra output that equals the nominal wage rate. 4) firm can sell the extra output. 2.An increase in the quantity of investment demanded (demand for loanable funds) occurs when 1) the real interest rate falls. 2) the real...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT