Consider a binary response variable y and an explanatory variable x. The following table contains the parameter estim ates o f the linear p ro b a b ility m odel (LPM) and the lo g it model, w ith the associated p-values shown in parentheses.

Variable LPM Logit Constant

– 0.40

(0.03)

– 4.50

(0.01)

x 0.32

(0.04)

1.54

(0.03)

a. Use both models to predict the probability of success as x varies from 1 to 5 w ith increments of 1.

b. Comment on the suitability of the linear probability model in modeling binary outcomes.