One of the limitations of the linear probability model is that it:
A) is difficult to interpret the resulting coefficient estimates.
B) suffers from multicollinearity.
C) may generate predictions that fall outside of the range of the outcome variable.
D) may lead to homoscedastic errors.

Question

Quizplus · Accepted Answer

The linear probability model assumes that the dependent variable is continuous and can take any value between 0 and 1. However, the model may generate predictions that fall outside of this range, which is not possible in reality. This violates the assumptions of the model and can lead to inaccurate predictions.

One of the Limitations of the Linear Probability Model Is