Although the logit and probit models may be superior to the LPM model, in practice, we should

Question:

Although the logit and probit models may be superior to the LPM model, in practice, we should choose the LPM model because of its simplicity per Occam's razor principle. Do you agree with this statement? Why or why not?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Essentials of Econometrics

ISBN: 978-0073375847

4th edition

Authors: Damodar Gujarati, Dawn Porter

See More Books

Question Posted: Apr 12, 2016 07:35 AM

See More Questions

Consider model (6.12) with complementary log-log link. a. Find x at which (x) = . b. show the greatest rate of change of (x) occurs at x = /. What does (x) equal at that point? Give the corresponding...
Repeat Exercise 11.6 using the logit model in Equation (11.10). Are the logit and probit results similar? Explain. Exercise 11.6 Use the estimated probit model in Equation (11.8) to answer the...
Let y i , i = 1,...,n, denote n independent binary random variables. a. Derive the log likelihood for the probit model Î¦ 1 [Ï(x i )] = j Î² j x ij . b. Show that the...
You are the manager of Fun World, a small amusement park. The accompanying diagram shows the demand curve of a typical customer at Fun World. a. Suppose that the price of each ride is $5. At that...
The following information relates to the intangible assets of Lettuce Express: a. On January 1, 2015, Lettuce Express completed the purchase of Farmers Produce, Inc., for $ 1,600,000 in cash. The...
What are the properties required for the bearing materials?
Show all the steps leading to the integral balance equation (18.6) in the text. Use the following boundary conditions and verify Eq. (18.7). (i) At $y=0, T=T_{\mathrm{S}}$. (ii) At...
The president of Healthy Heart Exercise Equipment Co. has been concerned about the growth in costs over the last several years. The president asked the controller to perform an activity analysis to...
Havana Hats makes the world's best hats. Information for the last eight months follows: Number of Hats Month January Produced Total Cost 1,800 $ 9,000 February 4,890 15,648 March 2,300 10,350 April...
Asbat Pharmaceuticals (Asbat) is a leading pharmaceutical company that has been in existence for 22 years. Asbat has a calendar year-end and is audited annually. Asbat only operates in the United...
What is wrong with the strategy of determining the number of lagged terms in a distributed lag model sequentially, that is, adding each successive lagged term if the t value of an added lagged term...
What is the connection between co integration and spurious regression?
What translation method should be used for a subsidiary that operates in a highly inflationary environment? Why?
Concerning Chapter 38, please match the term on the number with the most appropriate description from the column on the alphabet. Group of answer choices 1. Association organized to provide an...
To optimize upfront price estimates for patients, the Wellness Health Plan should: A. Post each local hospital's data from MedPar on Medicare's payments B. Post each local hospital's average charge...
Who has the most effective long-term academic goal? Multiple choice question. Carlton, who plans to purchase five rental properties over the next five years. Kim, who plans to complete a...
In terms of retention management strategies, what is the response to the following three questions: In the supplemental reading,you saw that SHRM states retention starts early with an employee. Why...
As the HR Manager in this situation, your main priority is to ensure the safety and well-being of all employees in the workplace. Therefore, it is important to approach the conversation with Robert...
The boxplots display the heights (in inches) of 130 members of a choir by the part they sing. a) It appears that the median height for sopranos is missing, but actually the median and the upper...
7. Baladna wants to analyze process that includes delivery by suppliers, production inside the company, transportation to to its customers and information systems. Then it also wants to find out...
Determine the mean and variance of the random variable in Exercise 3-15.
Determine the mean and variance of the random variable in Exercise 3-17.
Determine the mean and variance of the random variable in Exercise 3-19.
A corporation issues 13 %, 15-year bonds with a par value of $570,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 11%, which implies a selling price...
A production department reports the following conversion costs. Equivalent units of production for conversion total 436,000 units this period. Calculate the cost per equivalent unit of production for...
If you were asked whether a large university such as Tennessee or Michigan with a large seating capacity for their football stadiums should build a new football stadium, how would you respond and...

Although the logit and probit models may be superior to the LPM model, in practice, we should

Question:

Step by Step Answer:

Simplicity at any cost should not be the goal of the model b...View the full answer

Essentials of Econometrics

Students also viewed these Econometric questions