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Problem 4 (12 points) You have a sample of n independent observations. For each observation, you observe a discrete variable, y, which takes values 0
Problem 4 (12 points) You have a sample of n independent observations. For each observation, you observe a discrete variable, y, which takes values 0 and 1. You also observe a regressor, a, and you estimate a logit model in order to characterize the relationship between y and r (you use a and a constant as explanatory variables). Let o be the constant and let 8 be the coefficient on I. Suppose you estimate a to be 0.1 and 3 to be -1. (a) (6 points) What would be your point estimate of P(y = 1/z = 1)? (b) (6 points) What is the estimated marginal effect of r for an observation with r = 0? (Hint: you are asked to estimate AP/y-12) Oz evaluated at = = 0)
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