Question: (a) Describe the intuition behind the maximum likelihood estimation technique used for limited dependent variable models. (b) Why do we need to exercise caution when

(a) Describe the intuition behind the maximum likelihood estimation technique used for limited dependent variable models.

(b) Why do we need to exercise caution when interpreting the coefficients of a probit or logit model?

(c) How can we measure whether a logit model that we have estimated fits the data well or not?

(d) What is the difference, in terms of the model setup, in binary choice versus multiple choice problems?

AppendixLO1

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