Use the health expenditure data of Section 16.6. The model is a probit regression of DMED, an

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Use the health expenditure data of Section 16.6. The model is a probit regression of DMED, an indicator variable for positive health expenditures, against just one regressor for simplicity, NDISEASE, the number of chronic diseases.

(a) Obtain the OLS estimate of the slope parameter.

(b) Obtain the probit estimate of the slope parameter.

(c) Given part (b), obtain the marginal effect of chronic diseases in two ways: averaged over the sample and evaluated at the sample average of NDISEASE.

(d) Obtain the logit estimate of the slope parameter.

(e) Given part (d), obtain the marginal effect of chronic diseases in three ways: averaged over the sample, evaluated at the sample average of NDISEASE, and evaluated at \(\Lambda\left(\mathbf{x}^{\prime} \beta\right)=\bar{y}\).

(f) For the logit model calculate the proportionate change in the odds ratio when NDISEASE changes.image text in transcribed

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Microeconometrics Methods And Applications

ISBN: 9780521848053

1st Edition

Authors: A.Colin Cameron, Pravin K. Trivedi

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