Question: In Table 11.2, the estimated coefficient on black is 0.084 in column (1), 0.688 in column (2), and 0.389 in column (3). In spite of

In Table 11.2, the estimated coefficient on black is 0.084 in column (1), 0.688 in column (2), and 0.389 in column (3). In spite of these large differences, all three models yield similar estimates of the marginal effect of race on the probability of mortgage denial. How can this be?

Table 11.2

TABLE 11.2 Mortgage Denial Regressions Using the Boston HMDA Data Dependent variable: deny = 1 if mortgage application is denied, = 0 if accepted; 2380 observations. Regression Model Regressor black LPM Logit Probit Probit Probit Probit (1) (2) (3) (4) (5) (6) 0.084** 0.688** 0.389** 0.371** 0.363** (0.023) (0.182) (0.098) (0.099) (0.100) 0.246 (0.448) P/I ratio 0.449** 4.76** 2.44** 2.46** 2.62** 2.57** (0.114) (133) (0.61) (0.60) (0.61) (0.66) housing expense-to-income ratio -0.048 -0.11 -0.18 -0.30 -0.50 -0.54 (0.110) (1.29) (0.68) (0.68) (0.70) (0.74) medium loan-to-value ratio 0.031* 0.46** 0.21** 0.22** 0.22** 0.22** (0.80 loan-value ratio 0.95) (0.013) (0.16) (0.08) (0.08) (0.08) (0.08) high loan-to-value ratio (loan-value 0.189** 1.49** 0.79** 0.79** 0.84** 0.79** ratio > 0.95) (0.050) (0.32) (0.18) (0.18) (0.18) (0.18) consumer credit score 0.031** 0.29** 0.15** 0.16** 0.34** 0.16** (0.005) (0.04) (0.02) (0.02) (0.11) (0.02) mortgage credit score 0.021 0.28* 0.15* 0.11 0.16 0.11 (0.011) (0.14) (0.07) (0.08) (0.10) (0.08) public bad credit record 0.197** 1.23** 0.70** 0.70** 0.72** 0.70** (0.035) (0.20) (0.12) (0.12) (0.12) (0.12) denied mortgage insurance 0.702** 4.55** 2.56** 2.59** 2.59** 2.59** (0.045) (0.57) (0.30) (0.29) (0.30) (0.29) self-employed 0.060** 0.67** 0.36** 0.35** 0.34** 0.35** (0.021) (0.21) (0.11) (0.11) (0.11) (0.11) single 0.23** 0.23** 0.23** (0.08) (0.08) (0.08) high school diploma unemployment rate condominium -0.61** -0.60* -0.62** (0.23) (0.24) (0.23) 0.03 0.03 0.03 (0.02) (0.02) (0.02) -0.05 (0.09) black XP/I ratio -0.58 (1.47) black x housing expense-to-income ratio additional credit rating indicator variables 1.23 (1.69) constant applicant single; high school diploma, industry unemployment rate additional credit rating indicator variables no no no no yes no -0.183** (0.028) -5.71** (0.48) -3.04** (0.23) -2.57** (0.34) -2.90** (0.39) -2.54** (0.35) 5.85 (

Step by Step Solution

★★★★★

3.41 Rating (164 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

The differences in the estimated coefficients for black across the three models LPM Logit and Probit ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Econometrics Questions!

Collegiate Publishing Inc. began printing operations on March 1. Jobs 301 and 302 were completed during the month, and all costs applicable to them were recorded on the related cost sheets. Jobs 303...

can someone solve this Modern workstations typically have memory systems that incorporate two or three levels of caching. Explain why they are designed like this. [4 marks] In order to investigate...

MUST BE CORRECT ANSWERS A small software company has the following simplified cashflow, funded by shareholders' equity of 20,000 and a bank overdraft of 5000: Invoiced money received 2 months after...

software projects failed. In the run-up to Y2K, most of the world's large companies claimed that fixing the Millennium Bug was a large project whose success was critical to their survival. One would...

11.2 In Table 11.2, the estimated coefficient on black is 0.084 in column (1), 0.688 in column (2), and 0.389 in column (3). In spite of these large differences, all three models yield similar...

11.2 In Table 11.2 the estimated coefficient on black is 0.084 in column (1), 0.688 in column (2), and 0.389 in column (3). In spite of these large differences, all three models yield similar...

In Table 11.2 the estimated coefficient on black is 0.084 in column (1), 0.688 in column (2), and 0.389 in column (3). In spite of these large differences, all three models yield similar estimates of...

Hello. I need to write a three page review for the two articles attached. Each review should include a brief summary that include the major points of the article, as well as a summary of my own...

What are the methodology and findings of used in this article? 1204 Y. JIA, L. VAN LENT, AND Y. ZENG within a sample of men." Pound, Penton-Voak, and Surridge [2009] also report that circulating...

Demand and Supply Discussion Question: Applications-Ubereconomics Please read the article below and respond to the follow-up question: Why Uber Is an Economist's Dream Does 'surge pricing'...

Please Provide a 2 to 3 page article review for each, there attached on this question. Your discussion should include a brief summary (including the big ideas or major points of the article) along...

NBFM Figure 4(b) is a diagram of a commercial FM transmitter using Armstrong's method. Evaluate the multiplier value that applied to the FM transmitter system where the final output that is required...

Suppose there are two types of folks in the world - Slackers and Overachievers. Overachievers are, by nature, more productive than Slackers. However, employers cannot distinguish between these types...

Willy made the following 7 transfers during the current year. What it the numerical total of Willy's taxable gifts for the current year? Disregard the annual exclusion. Transferred $800,000 in cash...

Carbon monoxide (CO) is an odorless, colorless, highly toxic gas which is produced by fires as well as by motor vehicles and appliances that use carbon-based fuels. The Anterican Journal of Public...

If f: [a, b] x [c, d] R is continuous and D2f is continuous, define F (x, y) = xa (t,y) dt a. Find D1F and D2F. (b) If G (x) = g(x) f (t, x) dt, find G1 (x).

Let g1, g2: R2 R be continuously differentiable and suppose D1 g2= D2 R1.. As in Problem 2-21, let

a. Let g: Rn Rn be a linear transformation of one of the following types:

Consider the following information: State of Economy Probability of State of Economy Portfolio Return If State Occurs Recession .22 .12 Boom .78 .22 Calculate the expected return. (Do not round...

On October 2, 2020, Crane Company sold $6,520 of its elite camping gear (with a cost of $3,240 ) to Lynch Outfitters. As part of the sales agreement, Crane includes a provision that if Lynch is...

1. Omar Inc, manufactures an advanced swim fin for seuba divers. Management is now prepuring denaled bodgets for the third quarter, July through September, and has assembled the following information...