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Consider a binary response variable y and two explanatory variables x, and x2. The following table contains the parameter estimates of the linear probability model
Consider a binary response variable y and two explanatory variables x, and x2. The following table contains the parameter estimates of the linear probability model (LPM) and the logistic regression model, with the associated p-values shown in parentheses. Variable LPM Logistic Constant -0. 20 0.02 -2. 30 (0.06) X1 0. 45 (0.06) 0. 87 (0.04) X2 -0. 06 (0.02) -0. 10 (0.04) a. At the 5% significance level, comment on the significance of the variables for both models. Answer is complete and correct. Variable LPM Logistic X Significant Not significant X2 Significant Significant b. What is the predicted probability implied by the linear probability model for x1 = 5 with x2 equal to 20 and 22? (Round intermediate calculations to at least 4 decimal places and final answers to 2 decimal places.) X1 = 5, x, = 20 X1 = 5, x, = 22c. What is the predicted probability implied by the logistic regression model for x1 = 5 with x2 equal to 20 and 22? (Round intermediate calculations to at least 4 decimal places and final answers to 2 decimal places.) X1 = 5, X, = 20 *1 = 5, X, = 22
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