There Are Some Things Money Can't BuyYou are interested in analyzing the determinants of credit card approvals. For now, you believe thatsomeone's employment status (=1 if employed, 0 otherwise) is sufficient to explain credit approval.Approved is a dummy variable = 1 if approved, 0 otherwise.SourceModelResidualTotalapprovedemployed_consSS37.0161774125.285046162.301223dfapprovedemployedpriordefault37.01617741652 .192154978653Coef. Std. Err.MS.480806 .0346418.2513369 .0226668.248547049t P>|t|13.88 0.00011.09 0.000corr approved employed priordefault(obs=654)Number of obsF(1, 652)Prob > FR-squaredAdj R-squaredRoot MSEapproved employed priord~t1.00000.4776 1.00000.7190 0.4467 1.0000====A. What is the effect of being employed on approval odds?(PERCENT or PERCENTAGE POINTS) Round to the nearest whole number. First box is the value,second box is either PERCENT or PERCENTAGE POINTS.B. Is this effect statistically significant at the 99% level of confidence? Answer either "YES" or "NO"=C. Your friend says that this is wrong, that the real regression is missing whether or not applicantshave defaulted in the past or not (that is, they failed to pay their debts). Let priordefault be a dummyvariable = 1 if the applicant defaulted in the past and O otherwise. You want to run this regression:approved Bo + B₁ employed + B₂priordefault + uYou are also given this information about the relationship between the variables:654192.640.00000.22810.2269.43835[95% Conf. Interval].4127831 .5488288.2068282 .2958456If you omitted priordefault, does your original model in part (A) suffer from omitted variable bias foryour estimate of B₁? Answer "YES" or "NO". yesD. Which direction is this bias? Answer either "UPWARD" or "DOWNWARD" upward

a) To determine the effect of being employed on approval odds, we need to calculate the odds ratio…

Answered: There Are Some Things Money Can't Buy…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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There Are Some Things Money Can't Buy You are interested in analyzing the determinants of credit card approvals. For now, you believe that someone's employment status (=1 if employed, 0 otherwise) is sufficient to explain credit approval. Approved is a dummy variable = 1 if approved, 0 otherwise.