Since R 2 as a measure of goodness of fit is not particularly well suited for the dichotomous dependent variable models, one suggested alternative is the Iuml 2 test described below where N i number of observations in the ith cell P Igrave i actual probability of the event occurring ( n i N i ) P i...

The 2 test statistic here is 23449 whose p v ...

Since R 2 as a measure of goodness of fit is not particularly well suited for the

Question:

Since R²as a measure of goodness of fit is not particularly well suited for the dichotomous dependent variable models, one suggested alternative is the Ï‡²test described below:

N;(P, – P)² P*(1 – P*) x² =

where N_i = number of observations in the ith cell

PÌ‚_i = actual probability of the event occurring ( = n_i/N_i)

P^ˆ—_i= estimated probability

G = number of cells (i.e., the number of levels at which X_i is measured, e.g., 10 in Table 15.4)

It can be shown that, for large samples, Ï‡² is distributed according to the Ï‡² distribution with (G ˆ’ k) df, where k is the number of parameters in the estimating model (k < G).

Apply the preceding Ï‡² test to regression (15.7.1) and comment on the resulting goodness of fit and compare it with the reported R² value.

Distribution
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