Question: 8 Chapter 9 extends the bivariate logit and probit models to multi-category nominal scale variables, where the regress and has more than two nominal values.

8 Chapter 9 extends the bivariate logit and probit models to multi-category nominal scale variables, where the regress and has more than two nominal values. For example, consider the means of transportation to work. Suppose we have three choices: private car, public bus, or train. How do we decide among these choices? Can we still use OLS? As we will show in this chapter, such problems require nonlinear estimation techniques. Multinomial conditional logit or multinomial probit models discussed in this chapter show how multi-category nominal scale variables can be modeled.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
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 Introductory Econometrics Modern Questions!