In Example 7.12, we estimated a linear probability model for whether a young man was arrested during 1986:
arr86 - (0 + (1 pcnv + (2avgsen + (3 tot time + (4 ptime86 + (5 qemp86 + u.
(i) Estimate this model by OLS and verify that all fitted values are strictly between zero and one. What are the smallest and largest fitted values?
(ii) Estimate the equation by weighted least squares, as discussed in Section 8.5.
(iii) Use the WLS estimates to determine whether avgsen and tot time are jointly significant at the 5% level.