What is the underlying idea behind the probit model? Explain how parameters are estimated in the probit model.
Introduction In econometrics, many real-world situations involve binary outcomes — for example, whether a person purchases a product (yes or no), passes an exam (pass/fail), or defaults on a loan (default/no default). These binary dependent variable models require special treatment. One of the most widely used models for such data is the probit model. What […]