A binomial probability model is to be based on the following index function model: y* = ?
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A binomial probability model is to be based on the following index function model: y* = ? + ?d + ?, y = 1, if y* > 0, y = 0 otherwise. The only regress or, d, is a dummy variable. The data consist of 100 observations that have the following: Obtain the maximum likelihood estimators of ? and ?, and estimate the asymptotic standard errors of your estimates. Test the hypothesis that ? equals zero by using a Weld test (asymptotic t test) and a likelihood ratio test. Use the probit model and then repeat, using the log it model. Do your results change?
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A binomial probability model is to be based on the following index function model y a Bd y 1 if y 0 y 0 otherwise The only regressor d is a dummy variable The data consist of 100 observations that hav...View the full answer
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