Suppose you apply probit model to the mortgage denial analysis discussed in class. E [Y;\X¡1,… , X¡ik] = ¢ (Bo + X¡1ß1 + …+ X¡ikßr) The response variable Y_i takes the value 1 if the mortgage application was denied, O otherwise. (Here, the underscore "_" means "subscript". e.g. "Y_i" is read "Y subscript i".) The regressor X_i1 is the race dummy that takes value 1 if individual i belong to a minor race group. Other regressors X_i2,--.X_ik are variables that affect the decision making process of the reviewer. For example, applicant's income, wealth, employment status, other loan, and the
Suppose you apply probit model to the mortgage denial analysis discussed in class. E [Y;\X¡1,… , X¡ik] = ¢ (Bo + X¡1ß1 + …+ X¡ikßr) The response variable Y_i takes the value 1 if the mortgage application was denied, O otherwise. (Here, the underscore "_" means "subscript". e.g. "Y_i" is read "Y subscript i".) The regressor X_i1 is the race dummy that takes value 1 if individual i belong to a minor race group. Other regressors X_i2,--.X_ik are variables that affect the decision making process of the reviewer. For example, applicant's income, wealth, employment status, other loan, and the
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
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![Suppose you apply probit model to the mortgage denial analysis discussed in class.
E [Y;|X¡1, •…· , X¡k] = $ (Bo + X¡1ß1 +…+ X¡kßx)
The response variable Y_i takes the value 1 if the mortgage application was denied, O
otherwise. (Here, the underscore "_" means "subscript". e.g. "Y_i" is read "Y subscript i".) The
regressor X_i1 is the race dummy that takes value 1 if individual i belong to a minor race group.
Other regressors X_i2,--.X_ik are variables that affect the decision making process of the
reviewer. For example, applicant's income, wealth, employment status, other loan, and the
characteristic of property being purchased.
Interpret the coefficient B1.
the median partial effect of race on denial rate
the average partial effect of race on acceptance rate
the average partial effect of race on denial rate
the partial effect of race on the linear index](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fefb3926d-a816-4971-85e9-1f0dbdf5436e%2Fa2c6cc4d-22da-431e-b56c-f48875642d4f%2Fjuapq7i_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Suppose you apply probit model to the mortgage denial analysis discussed in class.
E [Y;|X¡1, •…· , X¡k] = $ (Bo + X¡1ß1 +…+ X¡kßx)
The response variable Y_i takes the value 1 if the mortgage application was denied, O
otherwise. (Here, the underscore "_" means "subscript". e.g. "Y_i" is read "Y subscript i".) The
regressor X_i1 is the race dummy that takes value 1 if individual i belong to a minor race group.
Other regressors X_i2,--.X_ik are variables that affect the decision making process of the
reviewer. For example, applicant's income, wealth, employment status, other loan, and the
characteristic of property being purchased.
Interpret the coefficient B1.
the median partial effect of race on denial rate
the average partial effect of race on acceptance rate
the average partial effect of race on denial rate
the partial effect of race on the linear index
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