Explain why the linear probability model is inadequate

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Reference no: EM132412142

Questions -

1. Explain why the linear probability model is inadequate as a specification for limited dependent variable estimation.

2. Compare and contrast the ‘probit' and ‘logit' specifications for binary choice variables.

3. What are the advantages of constructing a panel of data, if one is available, rather than using pooled data?

4. Explain how fixed effects models are equivalent to an ordinary least squares regression with dummy variables.

5. How does the random effects model capture cross-sectional heterogeneity in the intercept term?

Reference no: EM132412142

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