OLS is not the preferred model with binary dependent variables because it
A)does not account for negative values.
B)only accounts for positive values.
C)estimates constant marginal effects.
D)does not account for values greater than 1.

Question

Quizplus · Accepted Answer

OLS (Ordinary Least Squares) assumes constant marginal effects, which is not suitable for binary dependent variables where the relationship between independent variables and the probability of the dependent variable being 1 is not constant.

OLS Is Not the Preferred Model with Binary Dependent Variables