The Breusch-Pagan Lagrange Multiplier Test is used to determine whether random effects are significant in panel data models. On the other hand, the Hausman Test is used to choose between…
The usual Goodness-of-fit statistics such as R-square and Adjusted R-square are not applicable in the case of Qualitative Response models. This is because the Ordinary Least Squares method of estimation…
The Standard Error of an estimate is the measure of the standard deviation of that coefficient. It helps to determine the reliability or precision of a coefficient estimated by the…
The ordinal utility analysis involves indifference curves and budget lines to determine consumer choice. A consumer will choose the quantity of a commodity that maximizes utility, given the budget constraint.…
Revealed preference provides an alternative viewpoint to consumer preferences as compared to cardinal or ordinal utility analysis. Ordinal utility analysis vs Revealed Preference The ordinal utility analysis explains consumer choice…
Ordinal utility analysis and indifference curves were developed to overcome the shortcomings of the cardinal utility analysis, which is based on the unrealistic assumption that utility can be accurately measured…
Cardinal utility analysis attempts to explain the logic behind consumer behaviour by attaching value to the utility derived from the consumption of a commodity. By consuming a commodity that individuals…
