7/21/2019 Lab Likelihood 1

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Applied Econometrics Lab

Problem set - Likelihood 1

Rocco Mosconi

March 13, 2013

Model

Pr ( |; ) =à

0

1 + 0

! Ã1−  

0

1 + 0

!1−

Data (file greene19_1.gdt):

  =    

  = (1   )0

with:

•    = the student’s grade point average,

•      = dummy variable for whether the student’s grade in interme-

diate macroeconomics was higher than in the principles course,

•       = dummy variable for whether the individual participated in thePSI (Personalized System of Instruction),

•      = the student’s score on a pretest in economics.

Unknown parameters:

  = ( 0  

1  

2  

3)0

1. Estimate the parameters     with Maximum Likelihood; Interpret the signand the magnitude of the estimated parameters

1