Estimate a linear probability model:

Consider the multiple regression model:

y = β₀+β₁x₁+.....+β_kx_k +u

Suppose that assumptions MLR.1-MLR4 hold, but not assumption MLR.5

(a) Are the standard t and F-statistics valid if the sample is suf?ciently large? If not, what would you do about it?

(b) Suppose that the sample is very small. What is the implication for the heteroscedas-tic robust standard errors? Suppose that someone said that you instead should use Feasable Generalized Least Squares to correct for heteroscedasticity in small samples. What would be your response?

(a) Estimate a linear probability model that explains whether a man was arrested in 1986 by his prior criminal and employment record (pcnv, avgsen, tottime, ptime86, qemp86). Use robust standard errors. Why do you need to correct for heteroscedasticity? Justify

(b) What is the interpretation of the intercept?

(c) Interpret the effect of time locked up in 1986 (ptime86) on the probability of arrest. Is this a big effect?

(d) Set all explanatory variables to zero, except for ptime86, and compute the predicted probability of arrest in 1986 for a man who was locked up in all 12 months in 1986. Does this prediction make sense?

(e) Test whether avgsen and tottime are jointly statistically signi?cant at the 5% level. Would your test be valid if you had not used robust standard errors in (a)?

(f) Calculate the predicted probabilities and verify that all the ?tted values are between 0 and 1. What is the smallest value you observe? And the largest?

Posted Date: 2/14/2013 2:21:36 AM | Location : United States

Ask an Expert

Related Discussions:- Estimate a linear probability model, Assignment Help, Ask Question on Estimate a linear probability model, Get Answer, Expert's Help, Estimate a linear probability model Discussions

Write discussion on Estimate a linear probability model
Your posts are moderated

Write your message here..

Related Questions

Measurement errors models, How can we analyse data with four bilateral resp... How can we analyse data with four bilateral response variables measured with errors and three covariated measured without errors?

Official statistics, Importance of official statistic Importance of official statistic

Implement a simple k-means method, There exists an unclassified data set wi... There exists an unclassified data set with hidden data structures in it. The task in this assignment is to perform comprehensive Cluster Analysis in order to reveal the structures

#vital statistics, # I have to make assignment on vital statistics so kindl... # I have to make assignment on vital statistics so kindly guide me how to make and get good marks

What are the charateristics of a population for which, what are characteris... what are characteristics of a population for which it would be appropiate to use mean/median/mode

Changing the base of the index, How do you change the base of the index How do you change the base of the index

What-if Analysis, Ask Describe What-if Analysis Ask Describe What-if Analysis

HLT 362, What is an interaction? Describe an example and identify the varia... What is an interaction? Describe an example and identify the variables within your population (work, social, academic, etc.) for which you might expect interactions?

Risk of portfolios, Risk of Portfolios So far, we have seen the applic... Risk of Portfolios So far, we have seen the application of standard deviation in the context of risk in single investment. But usually most investors hold portfolios of securi

A new weight-watching company, A new weight-watching company, Weight Reduce... A new weight-watching company, Weight Reducers International, advertises that those who join will lose, on the average, 10 pounds the first two weeks with a standard deviation of 2