For the linear probability model y = β₀ + β₁x + ε,the predicted value of y is always constrained between ________. A) 0 and 1. B) −1 and 1. C) Both 0 and 1,and −1 and 1 are correct. D) None of these choices is correct.

Question

Quizplus · Accepted Answer

The linear probability model does not constrain the predicted values of y between 0 and 1. The predicted values can be outside this range, which is one of the limitations of the linear probability model.

For the Linear Probability Model Y = β0 + β1x

For the Linear Probability Model Y = β₀ + β₁x