After estimating a probit model to determine the effect of salary offers on whether or not the offer is accepted; Y_i^* = β₀ + β₁SalaryOffer_i + U_i, what would be the marginal effect associated with β₁? A) The probability of accepting an offer B) The probability of increasing the salary offered C) The increase in the probability of an offer being accepted from a unit increase in the salary D) The increase in salary associated with the offers that were accepted

Question

Quizplus · Accepted Answer

The marginal effect associated with β₁ is the change in the probability of an offer being accepted from a unit increase in the salary offered. In other words, it measures the impact of increasing the salary by one unit on the probability of accepting the offer. Therefore, the correct choice is C.

After Estimating a Probit Model to Determine the Effect of Salary