Question: Use the estimated linear probability model shown in column (1) of Table 11.2 to answer the following: a. Two applicants, one white and one black,

Use the estimated linear probability model shown in column (1) of Table 11.2 to answer the following:
a. Two applicants, one white and one black, apply for a mortgage. They have the same values for all the regressors other than race. How much more likely is the black applicant to be denied a mortgage?
b. Construct a 95% confidence interval for your answer to (a).
c. Think of an important omitted variable that might bias the answer in (a). What is it, and how would it bias the results?

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a The coefficient on black is 0084 indicating an estimated denial probability that is 84 percenta... View full answer

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