After Estimating a Probit Model for the Likelihood of a Website

question 30

Multiple Choice

After estimating a probit model for the likelihood of a website visitor clicking through conditional on the average income from the county in which the visit's IP address came from, you get the following results: ClickThrough_i = -1.8(0.75) + 0.06(0.005) Income_i, where standard errors are reported in parenthesis. What would be the calculation that yields the marginal effect of income moving from $40,000 to $41,000 on the click-through rate?

• A) -1.8 + 0.06 = -1.74
• B) Φ[0.06(41 - 40)]
• C) Φ(-1.8 + 0.06 × 41) - Φ(-1.8 + 0.06 × 40)
• D) 0.8

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Definitions:

Opportunity Cost

the value of the best alternative that is foregone when making a decision, representing the benefits that could have been received by taking a different path.

Painting

The process of applying pigment to a surface using tools such as brushes, to create an artistic expression.

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A process of cooking food by dry heat, especially in an oven, applied specifically to the creation of cakes.

Comparative Advantage

An economic principle that describes the ability of a country or individual to produce a particular good or service at a lower opportunity cost than others.