Econometrics, Applied Statistics

Assignment Help:
Ask question From the household budget survey of 1980 of the Dutch Central Bureau of Statistics, J. S. Cramer obtained the following logit model based on a sample of 2820 households. (The results given here are based on the method of maximum likelihood and are after the third iteration.)** The purpose of the logit model was to determine car ownership as a function of (logarithm of) income. Car ownership was a binary variable: Y = 1 if a household owns a car, zero otherwise.

Li = —2.77231 + 0.347582 ln Income t = (—3.35) (4.05) X2(1 df) = 16.681 (p value = 0.0000)

where Li = estimated logit and where ln Income is the logarithm of income. The X 2 measures the goodness of fit of the model.

a. Interpret the estimated logit model.

b. From the estimated logit model, how would you obtain the expression for the probability of car ownership?

c. What is the probability that a household with an income of 20,000 will own a car? And at an income level of 25,000? What is the rate of change of probability at the income level of 20,000?

d. Comment on the statistical significance of the estimated logit model.

"Optional.

" J. S. Cramer, An Introduction to the Logit Model for Economist, 2d ed., published and distributed by Timberlake Consultants Ltd., 2001, p. 33. These results are reproduced from the statistical package PcGive 10 published by Timberlake Consultants, p#Minimum 100 words accepted#

Related Discussions:- Econometrics

Chi square test for more than two rows, Using Chi Square Test when more tha...

Using Chi Square Test when more than two Rows are Present   To understand this, let us consider the contingency table shown below. It gives us the information about the stage

LPP, b. A paper mill produces two grades of paper viz., X and Y. Because of...

b. A paper mill produces two grades of paper viz., X and Y. Because of raw material restrictions, it cannot produce more than 400 tons of grade X paper and 300 tons of grade Y

Regression Analysis, Question 3 25 marks Your employer, Quick Hit Agency ...

Question 3 25 marks Your employer, Quick Hit Agency (QHA), is a debt collections agency. The company specializes in collecting small accounts. QHA does not deal in large accounts

CERTIFICATE OF AIRWORTHINESS FOR EXPORT, CERTIFICATE OF AIRWORTHINESS FOR E...

CERTIFICATE OF AIRWORTHINESS FOR EXPORT When aircraft manufacturers go into series production of a new type of aircraft, then obviously they are hopeful of world wide sales. Sim

Testing of hypothesis, Testing of Hypothesis One objective of sampling...

Testing of Hypothesis One objective of sampling theory is Hypothesis Testing. Hypothesis testing begins by making an assumption about the population parameter. Then we gather

Two methods of isolating trend values in a time series, a) What is meant by...

a) What is meant by secular trend? Discuss any two methods of isolating trend values in a time series.

Comparison of the principal averages-mean, Comparison of the Principal Aver...

Comparison of the Principal Averages-Mean, Median and Mode The mean, median, and mode are located at the same point in a symmetrical frequency distri

Estimate the standard deviation of the process, Estimate the standard devia...

Estimate the standard deviation of the process: Draw the X (bar) and R charts for the data given and give your comments about the process under study. Estimate the standard de

#title., Features of index numbers

Features of index numbers

Markov Chain, Each weekend, Derek either reads a book (B), goes to the cine...

Each weekend, Derek either reads a book (B), goes to the cinema (C), visits his local museum (M), or plays squash (S). If he reads a book one weekend, then he will take part in one

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd