Probit model explained: regression with binary variables (Excel)
How to perform regression analysis when your dependent variable is categorical or binary? How to predict whether the borrower repays their loan, forecast the next recession, or estimate whether a student passes or fails the exam? The probit model (or probit regression) comes to the rescue! Today we will learn how to estimate probit model parameters, coefficient standard errors, and how to forecast with it using a real-world example of credit scoring data, while also comparing it with the logit model. Econometrics is easy with NEDL!
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