A researcher, using a sample of 2,868 individuals from the National Longitudinal Sur- veys, is investigating how the pro

[answerhappygod]

A Researcher Using A Sample Of 2 868 Individuals From The National Longitudinal Sur Veys Is Investigating How The Pro 1 (233.57 KiB) Viewed 17 times

A researcher, using a sample of 2,868 individuals from the National Longitudinal Sur- veys, is investigating how the probability of a respondent obtaining a bachelor's degree from a four-year college is related to the respondent's score on ASVABC, the ability score. • 26.7 percent of the respondents earned bachelor's degrees. • ASVABC ranged from 22 to 65, with mean value 50.2, and most scores were in the range 40 to 60. Defining a variable BACH to be equal to 1 if the respondent has a bachelor's degree (or higher degree) and otherwise, the researcher fitted the OLS regression (standard errors in parentheses) BACH = -0.864 + 0.023ASVABC (0.042) (0.001) R=0.21 R She also fitted the following logit regression: Ż = -11.103 + 0.189 ASVABC (0.487) (0.009) where Z is the variable in the logit function. Using this regression, she plotted the probability and marginal effect functions shown in the diagram below. 1.0 0.05 08 0.04 0.6 0.03 Cumulative effect Marginal effect 0.4 0.02 02 0.01 00 0 0.00 100 20 40 60 80 ASVABC (a) Give an interpretation of the OLS regression and explain why OLS is not a satisfactory estimation method for this kind of model. (b) With reference to the diagram, discuss the variation of the marginal effect of the ASVABC score implicit in the logit regression and compare it with that in the OLS regression. (c) Sketch the probability and marginal effect diagrams for the OLS regression and compare them with those for the logit regression. (In your discussion, make use of the information given in the question above.)