The Population Logit Model of the Binary Dependent Variable Y

question 13

Essay

The population logit model of the binary dependent variable Y with a single regressor is
Pr(Y=1 X1)= .
Logistic functions also play a role in econometrics when the dependent variable is not a binary variable.For example,the demand for televisions sets per household may be a function of income,but there is a saturation or satiation level per household,so that a linear specification may not be appropriate.Given the regression model
Yi = + ui,
sketch the regression line.How would you go about estimating the coefficients?

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Definitions:

Intrinsic Value

The actual, inherent value of an asset, independent of its market price.

Warrants

Financial derivatives that provide the right, but not the obligation, to buy or sell a security at a specific price before a certain date.

Security Offering

The process of making new shares of a company available for sale to the public or specific investors, often to raise capital.

Shares Outstanding

The total number of shares of a corporation's stock that are owned by shareholders, including restricted shares.