Question: Consider the version of Fair's model in Example 10.6. Now, rather than predicting the proportion of the two-party vote received by the Democrat, estimate a

Consider the version of Fair's model in Example 10.6. Now, rather than predicting the proportion of the two-party vote received by the Democrat, estimate a linear probability model for whether or not the Democrat wins.
(i) Use the binary variable demwins in place of demvote in (10.23) and report the results in standard form. Which factors affect the probability of winning? Use the data only through 1992.
(ii) How many fitted values are less than zero? How many are greater than one?

(iv) Plug in the values of the explanatory variables for 1996. What is the predicted probability that Clinton would win the election? Clinton did win; did you get the correct prediction?
(v) Use a heteroskedasticity-robust t test for AR(1) serial correlation in the errors. What do you find?
(vi) Obtain the heteroskedasticity-robust standard errors for the estimates in part (i). Are there notable changes in any t statistics?

demwins 5,

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i ii iii Using the data only through 1992 gives demwins 441473 partyWH479 incum 059 partyWH gnews 107 354 205 036 024 partyWH inf 028 n 20 R 437 R 287 ... View full answer

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