Estimate a linear probability model, Applied Statistics

Estimate a linear probability model:

Consider the multiple regression model:

y = β01x1+.....+βkxk +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

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
Related Questions
What would be the cutoff score to indicate a score that is in the top 15% of the scores on a test with a mean of 100 and a standard deviation of 15? This question has multiple p

Variance The term variance was used to describe the square of the standard deviation by R.A.Fisher. The concept of variance is highly important in areas where it is possible to

Choose any published database from the internet or Bethel library (such as those from the Census Bureau or any financial sites). You may opt to use one of the data files provided b

difference between large sample test and small sample test

Suppose that before the minimum wage law change, the underlying mean number of part-time employees per Burger King Restaurant in New Jersey was 20.3. It was thought that the increa

Meaning of Interpolation and Extrapolation Interpolation is a method of estimating the most probable  missing figure on  the basis of given data under certain assumptions. On t

The incidence of occupational disease in an industry is such that the workers have a 20% chance of suffering from it. What is the probability that out of six workers 4 or more will

Under the standard cost method which is also referred as the standard cost method ,stock receipts are assigned a standard cost. Any variations between the actual cost and standard

First we look at these charts assuming that we know both the mean and the standard deviation of the process, that is  μ and  σ . These values represent the acceptable values (bench

Admissibility A very common concept which is applicable to any procedure of the statistical inference. The underlying notion is that the procedure/method is admissible if and o