Redo exercise 37 using a logit model. Consider an individual with an income of $60,000. What is the probability that she has insurance coverage if her employer contributes 50% of the premium? What if her employer contributes 75% of the premium?

Exercise 37

According to the National Coalition on Health Care, there has been a steady decline in the proportion of Americans who have health insurance. The rising insurance premiums have made it difficult for small employers to offer insurance and those that do offer insurance are contributing a smaller share of the premium. As a result, an increasing number of Americans do not have health insurance because they cannot afford it. Consider a portion of data in the following table relating to insurance coverage (1 for coverage, 0 for no coverage) for 30 working individuals in Atlanta, Georgia. Also included in the table is the percentage of the premium paid by the employer and the individual's income (in $1,000s).

Insurance ...............PremiumPercentage (in %)............ Income(in $1,000s)

1...................................................... 0.................................. 88

0...................................................... 0.................................. 60

â‹®......................................................................... â‹®............................................... â‹®

0..................................................... 60.................................. 60

Analyze a linear probability model for insurance coverage with premium percentage and income used as the explanatory variables.

Consider an individual with an income of $60,000. What is the probability that she has insurance coverage if her employer contributes 50% of the premium? What if her employer contributes 75% of the premium?

THE LOGIT MODEL

exp(bo t Dix) 1+expDo bability 1.2 A8 0.6 LPM: P bobx 0.4 0.2 exp(bo + b,x) Logit: P-1+explbo + bx) 0.2