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Consider a binary response variable y and two explanatory variables x1 and x2. The following
table contains the parameter estimates of the linear probability model (LPM) and the logistic
regression model, with the associated p-values shown in parentheses. a. Comment on the
significance of the variables at the 5% level. b. What is the predicted probability implied by the
linear probability model for x1=4 with x2 equal to 10 and 20 ? c. What is the predicted
probability implied by the logistic regression model for x1=4 with x2 equal to 10 and 20 ?

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Consider a binary response variable y and two explanatory variables x.pdf

  • 1. Consider a binary response variable y and two explanatory variables x1 and x2. The following table contains the parameter estimates of the linear probability model (LPM) and the logistic regression model, with the associated p-values shown in parentheses. a. Comment on the significance of the variables at the 5% level. b. What is the predicted probability implied by the linear probability model for x1=4 with x2 equal to 10 and 20 ? c. What is the predicted probability implied by the logistic regression model for x1=4 with x2 equal to 10 and 20 ?