Betit: A Family That Nests Probit and Logit
AbstractThis paper proposes a dichotomous choice model that is based on a transformed beta (or "z") distribution. This model, called betit, nests both logit and probit and allows for various skewed and peaked disturbance densities. Because the shape of this density affects the estimated relation between the dichotomous choice variable and its determinants, the greater flexibility of the transformed beta distribution is useful in generating more accurate representations of this relationship. The paper considers asymptotic biases of the logit and probit models under conditions where betit should have been used. It also investigates small sample power and provides two examples of applications that illustrative of the capability of the betit model.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 222.
Length: 39 pages
Date of creation: Dec 2000
Date of revision:
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Other versions of this item:
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
This paper has been announced in the following NEP Reports:
- NEP-PBE-2006-03-22 (Public Economics)
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