In the last set of lectures for the course, and in the following problem set, you will be asked

to understand and employ binary choice models.

Models of binary choice are appropriate when the dependent variable $($i$.$e$.,$ the object we are

trying to explain$)$ is binary $($usually $0$ or $1).$ Some examples include:

$$ The decision to buy a car $($equals one if the individual bought a car in the last calendar

year, and is otherwise zero