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QUESTION 4 Continue to use the information from Question 1. Choose the correct statement about column (7): O a. The coefficients are estimated by the usual OLS method. O b. A drawback of the model is that a predicted probability can be larger than 1. O C. The Probit model is easier to compute than the Logit mode when an interaction term is included. O d. The estimates suggest that the Government would be more likely to hire a woman than a man if both candidates have 16 years of schooling, but the Government would be more likely to hire a man than a woman if both candidates have 12 years of schooling. O e. The estimates suggest that the Government would hire a job candidate with a probability larger than 10% regardless of the gender.

QUESTION 4 Continue to use the information from Question 1. Choose the correct statement about column (7): O a. The coefficients are estimated by the usual OLS method. O b. A drawback of the model is that a predicted probability can be larger than 1. O C. The Probit model is easier to compute than the Logit mode when an interaction term is included. O d. The estimates suggest that the Government would be more likely to hire a woman than a man if both candidates have 16 years of schooling, but the Government would be more likely to hire a man than a woman if both candidates have 12 years of schooling. O e. The estimates suggest that the Government would hire a job candidate with a probability larger than 10% regardless of the gender.

Linear Algebra: A Modern Introduction
Linear Algebra: A Modern Introduction
4th Edition
ISBN:9781285463247
Author:David Poole
Publisher:David Poole
Chapter7: Distance And Approximation
Section7.3: Least Squares Approximation
Problem 31EQ
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QUESTION 4 Continue to use the information from Question 1. Choose the correct statement about column (7): O a. The coefficients are estimated by the usual OLS method. O b. A drawback of the model is that a predicted probability can be larger than 1. O C. The Probit model is easier to compute than the Logit mode when an interaction term is included. O d. The estimates suggest that the Government would be more likely to hire a woman than a man if both candidates have 16 years of schooling, but the Government would be more likely to hire a man than a woman if both candidates have 12 years of schooling. O e. The estimates suggest that the Government would hire a job candidate with a probability larger than 10% regardless of the gender.
Transcribed Image Text:QUESTION 4 Continue to use the information from Question 1. Choose the correct statement about column (7): O a. The coefficients are estimated by the usual OLS method. O b. A drawback of the model is that a predicted probability can be larger than 1. O C. The Probit model is easier to compute than the Logit mode when an interaction term is included. O d. The estimates suggest that the Government would be more likely to hire a woman than a man if both candidates have 16 years of schooling, but the Government would be more likely to hire a man than a woman if both candidates have 12 years of schooling. O e. The estimates suggest that the Government would hire a job candidate with a probability larger than 10% regardless of the gender.
QUESTION 1 Questions 1-4 are based on the following scenario: 700 income-earning individuals from a district were randomly selected and asked whether they were employed by the government (Gov = 1) or failed their entrance test (Gov = 0); data were also collected on their gender (Male = 1) if male and = 0 if female) and their years of schooling (Schooling, in years). The following table summarizes several estimated models. (Standard errors are in parentheses). Dependent Variable: Gov Linear Linear Probit Logit Probability Probit Logit Probability Probit (1) (2) (3) (4) (5) (6) (7) Schooling 0.272 0.551 0.035 0.548 (0.029) (0.062) (0.003) (0.091) Male -0.242 -0.455 -0.050 4.352 (0.125) (0.234) (0.025) (1.291) Male x Schooling -344 (0.096) -4.107 (0.358) Constant -8.146 -0.172 -1.027 -1.717 0.152 -7.702 (0.800) (0.027) (0.098) (0.179) (0.021) (1.238) Choose the correct statement: O a. The large difference between the estimates in column (1) and the ones in column (2) implies that predicted probabilities would be highly sensitive to whether the Logit model is employed or the Probit model is employed. O b. Column (1) suggests that the government would hire a job candidate with 16 years of education with 24.5% probability, i.e., 0.245 = 0.272 X 16 - 4.107. O C. Column (2) suggests that the government would hire a job candidate with 16 years of education with 67.0% probability, i.e., 0.670 = 0.551 X 16 - 8.146. O d. Column (3) suggests that the government would hire a job candidate with 16 years of education with 38.8% probability, i.e., 0.388 = 0.035 X 16 - 0.172. O e. Column (4) suggests that the government would not hire anyone because the estimated coefficients are all negative.
Transcribed Image Text:QUESTION 1 Questions 1-4 are based on the following scenario: 700 income-earning individuals from a district were randomly selected and asked whether they were employed by the government (Gov = 1) or failed their entrance test (Gov = 0); data were also collected on their gender (Male = 1) if male and = 0 if female) and their years of schooling (Schooling, in years). The following table summarizes several estimated models. (Standard errors are in parentheses). Dependent Variable: Gov Linear Linear Probit Logit Probability Probit Logit Probability Probit (1) (2) (3) (4) (5) (6) (7) Schooling 0.272 0.551 0.035 0.548 (0.029) (0.062) (0.003) (0.091) Male -0.242 -0.455 -0.050 4.352 (0.125) (0.234) (0.025) (1.291) Male x Schooling -344 (0.096) -4.107 (0.358) Constant -8.146 -0.172 -1.027 -1.717 0.152 -7.702 (0.800) (0.027) (0.098) (0.179) (0.021) (1.238) Choose the correct statement: O a. The large difference between the estimates in column (1) and the ones in column (2) implies that predicted probabilities would be highly sensitive to whether the Logit model is employed or the Probit model is employed. O b. Column (1) suggests that the government would hire a job candidate with 16 years of education with 24.5% probability, i.e., 0.245 = 0.272 X 16 - 4.107. O C. Column (2) suggests that the government would hire a job candidate with 16 years of education with 67.0% probability, i.e., 0.670 = 0.551 X 16 - 8.146. O d. Column (3) suggests that the government would hire a job candidate with 16 years of education with 38.8% probability, i.e., 0.388 = 0.035 X 16 - 0.172. O e. Column (4) suggests that the government would not hire anyone because the estimated coefficients are all negative.
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