Limited-Dependent and Qualitative Variables in Econometrics
Econometrics pp Cite as. In labor economics, one is faced with explaining the decision to participate in the labor force, the decision to join a union, or the decision to migrate from one region to the other. In finance, a consumer defaults on a loan or a credit card debt, or purchases a stock or an asset like a house or a car. In these examples, the dependent variable is usually a dummy variable with values 1 if the worker participates or consumer defaults on a loan and 0 if he or she does not participate or default. We dealth with dummy variables as explanatory variables on the right hand side of the regression, but what additional problems arise when this dummy variable appears on the left hand side of the equation?
Skip to search form Skip to main content. Maddala Published DOI: Despite the traditional emphasis on continuous variables in econometrics, many of the economic variables encountered in practice are categorical those for which a suitable category can be found but where no actual measurement exists or truncated those that can be observed only in certain ranges. View PDF. Save to Library. Create Alert.
Ann A. McDermed, Maddala, G. Limited-Dependent and Qualitative Variables in Econometrics. Most users should sign in with their email address. If you originally registered with a username please use that to sign in. To purchase short term access, please sign in to your Oxford Academic account above.