Binary Outcomes in Decision Making Quiz
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Questions and Answers

What type of variable is the outcome of interest in the examples provided?

  • Binary (correct)
  • Ordinal
  • Continuous
  • Categorical

    • What distinguishes regression with a binary dependent variable from regression with a continuous dependent variable?

  • The need for different estimation techniques (correct)
  • The use of different types of predictors
  • The presence of homoscedasticity in the residuals
  • The requirement for larger sample sizes

    • What is the simplest model to use with binary dependent variables?

  • Logistic regression model
  • ANOVA
  • K-means clustering
  • Linear probability model (correct)

    • Which act led to the compilation of the Boston HMDA data?

    <p>Home Mortgage Disclosure Act (HMDA)</p> Signup and view all the answers

    What year do the mortgage applications in the Boston, Massachusetts, area data relate to?

    <p>1990</p> Signup and view all the answers

    Which type of data are the Boston HMDA data described as?

    <p>Structured data</p> Signup and view all the answers

    What are the two most important disadvantages of the linear probability model?

    <p>Fitted probabilities can be less than zero or greater than one and the partial effect of any explanatory variable is not constant</p> Signup and view all the answers

    What is the primary interest in a binary response model?

    <p>Estimating the probability of a given response category</p> Signup and view all the answers

    In a binary response model, if x represents explanatory variables, what does y typically denote?

    <p>Response indicator variable</p> Signup and view all the answers

    How do more sophisticated binary response models overcome the limitations of the linear probability model?

    <p>By allowing negative fitted probabilities and non-constant partial effects</p> Signup and view all the answers

    Which set of explanatory variables might be included in x when analyzing employment status in a binary response model?

    <p>Individual characteristics like education and age</p> Signup and view all the answers

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