A potential shortcoming of the probit/logit models is that to get consistent estimates of the parameters:
A) the unobservables must be distributed via the standard normal (for probit) and logistically (for the logit).
B) coefficient estimates cannot be evaluated against alternative hypotheses.
C) the determining function must be linear.
D) moment conditions are required for each parameter to be estimated.

Question

Quizplus · Accepted Answer

The probit and logit models assume specific distributions for the error terms—standard normal for probit and logistic for logit. This assumption is crucial for the models to produce consistent parameter estimates. If the actual distribution of the unobservables deviates significantly from these assumptions, the model estimates may be inconsistent.

A Potential Shortcoming of the Probit/logit Models Is That to Get