Binary Dependent Variable. President winning reelection based on stock market performance. Binary Dependent Variables In some cases the outcome of interest rather than one of the right hand side variables is discrete rather than continuous The simplest example of this is when the Y variable is binary so that it can take only 1 or 2 possible values.
In particular we consider models where the dependent variable is binary. The assumption is absence of collinearity between the indipendent ones. So far the dependent variable Y has been continuous.
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1i β2X2i βkXkiui Y i β 0 β 1 X 1 i β 2 X 2 i β k X k i u i with a binary dependent variable Y i Y i is called the linear probability model. President winning reelection based on stock market performance. So far the dependent variable Y has been continuous. Binary Dependent Variable Introduction ot EconometricsFall 2020 Zhaopeng Qu Nanjing University 1112020 Zhaopeng Qu Nanjing University Lecture 7.
