Linear probability model, Mathematics

Assignment Help:

Pepsi:               A dummy variable where 1 denotes choice of Pepsi by the i-th customer and 0 otherwise

Price_P:           The price of a 2-liter bottle of Pepsi at the time of purchase

Price_7:           The price of a 2-liter bottle of 7-Up at the time of purchase

Price_C:           The price of a 2-liter bottle of Coke at the time of purchase

Disp_P:            A dummy variable where 1 denotes whether Pepsi was displayed at the time of purchase and 0 otherwise

The purpose of this exercise is to determine the factors that explain the choice of Pepsi over other types of colas.

  a. Using these data, estimate the probability (proportion) of a customer choosing Pepsi for (i) all cases; and (ii) for the cases where Pepsi is displayed.

  b. Assuming that a relationship exists between choosing Pepsi as the dependent variable and the rest as the independent variables, hypothesize the signs of the βk coefficients.

  c. Run 3 regressions of this relationship using a linear probability model, a logit model, and a probit model, and make a summary table including the estimated coefficients with their t/z ratios, R2, and the proportion of correct predictions coming from the 3 models.

  d. Calculate the proportion of correct predictions coming from the 3 models.

  e. Without running a significance test, evaluate the estimated coefficients.

  f.  Create a second table with the transformed coefficients of the logit and probit models to make them comparable to those of the linear probability model E.

 g. Using the 3 models, evaluate the probability of choosing Pepsi when Pepsi is displayed and when Pepsi is not displayed while the prices of all three drinks are equal at $1.50 per 2-liter bottle.


Related Discussions:- Linear probability model

#title LOGIC, HOW MANY ZERO ARE THERE AT THE END OF 200

HOW MANY ZERO ARE THERE AT THE END OF 200

Define euler circuit and euler path, Define Euler Circuit and Euler Path.  ...

Define Euler Circuit and Euler Path.  Which of the following graphs have an Euler circuit and Euler path.

Real and distinct roots, Now we start solving constant linear, coefficient ...

Now we start solving constant linear, coefficient and second order differential and homogeneous equations. Thus, let's recap how we do this from the previous section. We start alon

Prove that a simple graph is connected, Prove that a simple graph is connec...

Prove that a simple graph is connected if and only if it has a spanning tree.    Ans: First assume that a simple graph G has a spanning  tree T.  T consists of every node of G.

Subspace of r containing n, Give an example of each of the following given ...

Give an example of each of the following given below . You do not require to give any justi cation. (a) A nonempty, bounded subset of Q with no in mum in Q. (b) A subspace of

I am mathematics expert, i want some assignment for earning i am mathemati...

i want some assignment for earning i am mathematics expert plz provide us mathematics assignment as soon as possible

What is her commission if she sells a $359, A real estate agent makes a 1.5...

A real estate agent makes a 1.5% commission on her sales. What is her commission if she sells a $359,000 house? Multiply $359,000 by the decimal equivalent of 1.5% (0.015) to ?

Cartesian graph of density of water - temperature, Cartesian Graph of Densi...

Cartesian Graph of Density of Water - Temperature: Example:  The  density  of  water  was  measured  over  a  range  of  temperatures.   Plot the subsequent recorded data on

VECTOR, the sum of the vector QR, -SR, TQ and 2ST is?

the sum of the vector QR, -SR, TQ and 2ST is?

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