Probit Model: Theory and Estimation
The Probit Model is used when we have a binary or qualitative dependent variable in the model. Similar to the Logit Model, the Probit Model overcomes the difficulties or problems…
The Probit Model is used when we have a binary or qualitative dependent variable in the model. Similar to the Logit Model, the Probit Model overcomes the difficulties or problems…
The Logit Model is used to estimate models with a qualitative binary dependent variable. It overcomes the problems associated with the Linear Probability Model (LPM). In the post on LPM,…
The Linear Probability Model is an application of Ordinary Least Squares to qualitative response or dependent variables. We often encounter dependent variables that are continuous, such as income or consumption,…
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…