When should a probit model be used?
A)when you need a binary choice model that allows for varying marginal effects
B)when you need to model the heteroskedasticity in the linear probability model
C)to allow for endogenous regressors in a binary choice model
D)to allow for multiple explanatory variables in a binary choice model

Question

Quizplus · Accepted Answer

A probit model should be used when a binary choice model is needed that allows for varying marginal effects. The probit model estimates the probability of an event occurring and can also account for factors that affect the probability.

When Should a Probit Model Be Used