Limited dependent variable
In this article we are going to explore Limited dependent variable, a topic that has captured the attention of many over the years. From its origins to its impact on modern society, Limited dependent variable has been the subject of debate and discussion. As we delve deeper into this topic, we will discover its implications in different areas, as well as the advances and challenges that surround it. Using a critical and analytical approach, we will examine the importance of Limited dependent variable in today's world and how it has shaped our perception and understanding of it. Through this article, we hope to offer a deeper and more complete vision of Limited dependent variable, inviting our readers to reflect on its relevance and meaning today.
| Part of the behavioral sciences |
| Economics |
|---|
 |
 Principles of Economics |
A limited dependent variable is a variable whose range of possible values is "restricted in some important way."[1] In econometrics, the term is often used when estimation of the relationship between the limited dependent variable of interest and other variables requires methods that take this restriction into account. For example, this may arise when the variable of interest is constrained to lie between zero and one, as in the case of a probability, or is constrained to be positive, as in the case of wages or hours worked.
Limited dependent variable models include:[2]
- Censoring, where for some individuals in a data set, some data are missing but other data are present;
- Truncation, where some individuals are systematically excluded from observation (failure to take this phenomenon into account can result in selection bias);
- Discrete outcomes, such as binary decisions or qualitative data restricted to a small number of categories. Discrete choice models may have either unordered or ordered alternatives; ordered alternatives may take the form of count data or ordered rating responses (such as a Likert scale).[3]
See also
- Logit, logit model, ordered logit
- Multivariate probit models
- Probit, probit model, ordered probit
- Tobit model
See also
References
- ^ Wooldridge, J.M. (2002). Econometric Analysis of Cross Section and Panel Data. MIT Press, Cambridge. p. 451. ISBN 0-262-23219-7. OCLC 47521388.
- ^ Maddala, G.S. (1983). Limited-Dependent and Qualitative Variables in Econometrics. Cambridge University Press, Cambridge, UK. ISBN 0-521-33825-5. OCLC 25207809.
- ^ Stock, James H.; Watson, Mark W. (2003). Introduction to Econometrics. Addison-Wesley, Boston. pp. 328–9. ISBN 0-201-71595-3. OCLC 248704396.
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