Suppose You Are Interested in Explaining the Probability of Switching

question 11

Essay

Suppose you are interested in explaining the probability of Switching Jobs in a sample of 32,517 men and women and that using the probit you obtain the following coefficient estimates (standard errors in parentheses)
$\begin{array}{llcc}Swi\widehat {tch ~J}obs_ { i } = & 1.17 -& 1.86 \text { Salary } _ { i } - & 0.93 \text { Experience } _ { i } + &0.98 \text { Rent Home } _ { i } & - 1.24 \text { Number of Children } \\& ( 0.26 )& ( 0.72 ) &(0.45)&( 0.41)& ( 0.59 )\end{array}$

a)How should you interpret the estimated coefficient on Salary? Does this make economic sense? Explain.
b)How should you interpret the estimated coefficient on Rent Home? Does this make economic sense? Explain.
c)Do these estimates provide all of the information that you desire? If not,how can you obtain that information? Explain.

---

Definitions:

Perceived Risk

The level of risk that consumers or investors believe is associated with a product, investment, or decision, which may not always match the actual risk.

Annual Dividend

The total dividend payment a shareholder receives per share of stock held over a year.

Increase by

Refers to the act of becoming larger or more by a specific amount or rate.

Rate of Return

Variation in the value of an investment over a specific duration, measured as a percentage of the investment's starting cost.