Dummy variables take values of 0 or 1 to indicate the absence or presence of categorical effects. There are dependent and independent dummy variables. Probit, tobit, and logit models use dependent dummy variables, with probit using a standard normal distribution, tobit modeling non-negative dependent variables, and logit using a formula to describe the relationship between a dependent variable from 0 to 1 and an independent variable.

2. Dummy variables
A dummy variable (also known as an
indicator variable, design variable,Boolean
indicator, categorical variable, binary
variable, or qualitative variable) is one
that takes the value 0 or 1 to indicate the
absence or presence of some categorical
effect that may be expected to shift the
outcome.

3. Types of dummy variable
Dependent dummy
Independent dummy
Dependent dummy variable:
Probit model
Tobit model
Logit model

4. Probit model:
The probit function is the
quantile function associated with the
standard normal distribution, which is
commonly denoted as N(0,1).It is a
bivariate model.

5. Tobit model:
The Tobit model is a statistical
modelproposed by James Tobin to
describe the relationship between a non-
negative dependent variable and an
independent variable.
It includes two results.They are
Probability of adoption
Intensity of adoption

6. Logit model:
The logit of a number p between 0
and 1 is given by the formula:

7.  Thank you…….