Download e-book for kindle: Analysis of microdata : with 38 figures and 41 tables by Rainer Winkelmann; Stefan Boes

By Rainer Winkelmann; Stefan Boes

ISBN-10: 3540296050

ISBN-13: 9783540296058

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Extra resources for Analysis of microdata : with 38 figures and 41 tables

Example text

7 are somewhat unrealistic for two reasons. First, they do not include any parameters, although parameters are essential for econometric modeling. Second, they suggest that microeconometric model-building starts with a joint probability or density function and derives the corresponding conditional function. But this is not the usual procedure. The reason is that it is both difficult and unnecessary to specify a full joint model. It is difficult, because in more realistic set-ups there are many explanatory variables and parameters, and except for special cases (such as if X and Y are multivariate normally distributed) the derivations may become cumbersome and the integrals required may not even have a closed-form solution.

3. Suppose you have a binary dependent variable, yi ∈ {0, 1}, with conditional probability function given by f (yi |xi β) = exp(xi β) 1 + exp(xi β) yi 1 1 + exp(xi β) 1−yi • Derive P (yi = 0|xi ) and P (yi = 1|xi ). • Determine the absolute (relative) marginal probability effects for xil . • How does your answer change if you replace xil by log xil . Marginal probability effects can be used to approximate the discrete change in probabilities using the concept of differentials ∆P (yi |xi ) ≈ ∂P (yi |xi ) ∆xil ∂xil and the smaller the absolute change in xil , the better the approximation.

C) Let Y1 ∼ N ormal(µ1 , σ12 ) and Y2 ∼ N ormal(µ2 , σ22 ) denote two independent and normally distributed random variables. Then Y1 + 3Y2 ∼ N ormal(µ1 + 3µ2 , σ12 + 3σ22 ). ), y = 0, 1, 2, . .. 594. 233. 22 Assume that you have access to a survey on video games. The data comprises 91 individuals aged 18 to 31 and contains the following information: • • • • • • Time spent playing video games in the week prior to the survey — in hours, no answer (-1) Do you like to play video games? — never played (1), very much (2), somewhat (3), not really (4), not at all (5) How often do you play video games?

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Analysis of microdata : with 38 figures and 41 tables by Rainer Winkelmann; Stefan Boes

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