Asked by Jr
The following estimates were made from a sample of 100 individuals. Thedependent variable is 1 if the person is self-employed and 0 otherwise.
OLS = - 0.151 + 0.009age + 0.065gender + 0.014Ed1 – 0.006Ed2 (0.016) (0.003)(0.003)(0.008)(0.005)
Logit = -3.780 + 0.097Age + 0.619gender + 0.111Ed1 – 0.043Ed2 (0.168) (0.033)(0.033)(0.062)(0.047)
Where
Age = age in years; gender = 1 if male, 0 if female; Ed1 = 1 if completed a degree, 0 otherwise; Ed2 = 1 if has a non-degree higher educational qualification, 0 otherwise;. The figures in brackets are conventionally calculated standard errors for the OLS estimates, asymptotic standard errors for the probit estimates.
i) Interpret the estimated coefficients of both OLS and Logit model.
ii) What are the estimated probabilities that a man aged 40 with Ed1=1 is self- employed using the above models?
OLS = - 0.151 + 0.009age + 0.065gender + 0.014Ed1 – 0.006Ed2 (0.016) (0.003)(0.003)(0.008)(0.005)
Logit = -3.780 + 0.097Age + 0.619gender + 0.111Ed1 – 0.043Ed2 (0.168) (0.033)(0.033)(0.062)(0.047)
Where
Age = age in years; gender = 1 if male, 0 if female; Ed1 = 1 if completed a degree, 0 otherwise; Ed2 = 1 if has a non-degree higher educational qualification, 0 otherwise;. The figures in brackets are conventionally calculated standard errors for the OLS estimates, asymptotic standard errors for the probit estimates.
i) Interpret the estimated coefficients of both OLS and Logit model.
ii) What are the estimated probabilities that a man aged 40 with Ed1=1 is self- employed using the above models?
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