Question 4

Choose the correct statement about column (7): O a. The coefficients are estimated by the usual OLS method. O b. A drawback of the model is that a predicted probability can be larger than 1. C. The Probit model is easier to compute than the Logit mode when an interaction term is included. The estimates suggest that the Government would be more likely to hire a woman than a man if both candidates have 16 years of schooling, but the Government would be more likely to hire a man than a woman if both candidates have 12 years of schooling. e. The estimates suggest that the Government would hire a job candidate with a probability larger than 10% regardless of the gender.700 income-earning individuals from a district were randomly selected and asked whether they were employed by the government (Gov = 1) or failed their entrance test (Gov = 0) data were also collected on their gender (Male = 1) if male and = 0 if female) and their years of schooling (Schooling, in years). The following table summarizes several estimated models. (Standard errors are in parentheses). Dependent Variable: Gov Linear Linear Probit Logit Probability Probit Logit Probability Probit (1) (2) (3) (4) (5) (6) (7) Schooling 0.272 0.551 0.035 0.548 (0.029) (0.062) (0.003) (0.091) Male -0.242 -0.455 -0.050 4.352 (0.125) (0.234) (0.025) (1.291) Male X Schooling -.344 (0.096) Constant -4.107 -8.146 -0.172 -1.027 -1.717 0.152 -7.702 (0.358) (0.800) (0.027) (0.098) (0.179) (0.021) (1.238)