Question: Suppose that you estimated a multinomial logit model with a categorical variable indicating mothers employment status as the outcome (1=not employed, 2=employed part-time, 3=employed full-time)

Suppose that you estimated a multinomial logit model with a categorical variable indicating mothers’ employment status as the outcome (1=not employed, 2=employed part-time, 3=employed full-time) and father’s annual earnings as the predictor (rescaled to $10,000 units, Range: 1 to 20). Suppose that you obtained the following statistically signifi cant coeffi cient estimates for the prediction equations, with mother not employed as the reference outcome category: β

ˆ

0,2 v 1 =

1.10 for the intercept and β

ˆ

1,2 v 1 = −0.10 for the slope of father’s earnings with part-time employment as the outcome; and, β

ˆ

0,3 v 1 = 1.19 for the intercept and β

ˆ

1,3 v 1

= −0.11 for the slope of father’s earnings with full-time employment as the outcome. Respond to the following:

(a) Calculate the predicted probability for being in each outcome category for mothers whose husbands earn $30,000 per year.

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