Question: 11.9 Use the estimated linear probability model shown in column (1) of Table 11.2 to answer the following: a. Two applicants, one self-employed and one

11.9 Use the estimated linear probability model shown in column (1) of Table 11.2 to answer the following:

a. Two applicants, one self-employed and one in salaried employment, apply for a mortgage. They have the same values for all the regressors other than employment status. How much more likely is the selfemployed applicant to be denied a mortgage?

b. Construct a 95% confidence interval for your answer to (a).

c. Think of an important omitted variable that might bias the answer in (a).

What is it, and how would it bias the results?

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