Question: Use the data set 401KSUBS.RAW for this exercise. (i) Using OLS, estimate a linear probability model for e401k, using as explanatory variables inc, inc2, age,
(i) Using OLS, estimate a linear probability model for e401k, using as explanatory variables inc, inc2, age, age2, and male. Obtain both the usual OLS standard errors and the heteroskedasticity-robust versions. Are there any important differences?
p(x), where p(x) = (0 + (1x1 + ... + (kxk.}
(iii) For the model estimated from part (i), obtain the White test and see if the coefficient estimates roughly correspond to the theoretical values described in part (ii).
(iv) After verifying that the fitted values from part (i) are all between zero and one, obtain the weighted least squares estimates of the linear probability model. Do they differ in important ways from the OLS estimates?
on y, i
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i In the following equation estimated by OLS the usual standard errors are in and the heteroskedasti... View full answer
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