IDEAS home Printed from https://ideas.repec.org/a/cup/jagaec/v12y1980i02p65-69_01.html
   My bibliography  Save this article

Estimating Linear Probability Functions: A Comparison of Approaches

Author

Listed:
  • Debertin, David L.
  • Pagoulatos, Angelos
  • Smith, Eldon D.

Abstract

A linear probability function permits the estimation of the probability of the occurrence or non-occurrence of a discrete event. Nerlove and Press (p. 3–9) outline several statistical problems that arise if such a function is estimated via OLS. In particular, heteroskedasticity inherent in such a regression model leads to inefficient estimates of parameters (Amemiya 1973, Horn and Horn). Moreover, without restrictions on the conventional OLS model, probability estimates lying outside the unit (0–1) interval are possible (Nerlove and Press). Goldberger and Kmenta suggest two approaches for alleviating the heteroskedasticity problems inherent in the OLS regression model. Logit analysis will also alleviate heteroskedasticity problems and ensure that estimated probabilities will lie within the unit interval (Amemiya 1974, Hauck and Donner, Hill and Kau, Horn and Horn, Horn, Horn, and Duncan, Theil 1970).

Suggested Citation

  • Debertin, David L. & Pagoulatos, Angelos & Smith, Eldon D., 1980. "Estimating Linear Probability Functions: A Comparison of Approaches," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 12(2), pages 65-69, December.
    • Handle: RePEc:cup:jagaec:v:12:y:1980:i:02:p:65-69_01
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S0081305200015636/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Smith, Eldon D. & Deaton, Brady J. & Kelch, David R., 1978. "Location Determinants of Manufacturing Industry in Rural Areas," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 10(1), pages 23-32, July.
    2. Lowell Hill & Paul Kau, 1973. "Application of Multivariate Probit to a Threshold Model of Grain Dryer Purchasing Decisions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 55(1), pages 19-27.
    3. Batie, Sandra S., 1978. "Discussion: Location Determinants Of Manufacturing Industry In Rural Areas," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 10(1), pages 1-5, July.
    4. Batie, Sandra S., 1978. "Discussion: Location Determinants of Manufacturing Industry in Rural Areas," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 10(1), pages 33-37, July.
    5. Li, Mingche M, 1977. "A Logit Model of Homeownership," Econometrica, Econometric Society, vol. 45(5), pages 1081-1097, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kusmin, Lorin D., 1994. "Factors Associated with the Growth of Local and Regional Economies: A Review of Selected Empirical Literature," Staff Reports 278733, United States Department of Agriculture, Economic Research Service.
    2. Kriesel, Warren & McNamara, Kevin T., 1991. "A County-Level Model Of Manufacturing Plant Recruitment With Improved Industrial Site Quality Measurement," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 23(1), pages 1-7, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kriesel, Warren P. & Deaton, Brady J. & Johnson, Thomas G., 1984. "Industrial development as a community investment decision," 1984 Annual Meeting, August 5-8, Ithaca, New York 279049, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Jason P. Brown & Raymond J.G.M. Florax & Kevin T. McNamara, 2009. "Determinants Of Investme??T Flows In U.S. Manufacturing," Working Papers 09-10, Purdue University, College of Agriculture, Department of Agricultural Economics.
    3. LaDue, Eddy L. & Miller, Lynn H. & Kwiatkowski, Joseph H., 1990. "Investment Behavior And Energy Conservation," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 19(2), pages 1-10, October.
    4. Jason P. Brown & Dayton M. Lambert & Raymond J. G. M. Florax, 2013. "The Birth, Death, and Persistence of Firms: Creative Destruction and the Spatial Distribution of U.S. Manufacturing Establishments, 2000–2006," Economic Geography, Clark University, vol. 89(3), pages 203-226, July.
    5. Lambert, D.M. & Wilcox, M. & English, A. & Stewart, L., 2008. "Ethanol Plant Location Determinants and County Comparative Advantage," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 40(1), pages 117-135, April.
    6. Ben C. Arimah, 1997. "The Determinants of Housing Tenure Choice in Ibadan, Nigeria," Urban Studies, Urban Studies Journal Limited, vol. 34(1), pages 105-124, January.
    7. Corradin, S. & Gropp, R. & Huizinga, H.P. & Laeven, L., 2010. "Who Invests in Home Equity to Exempt Wealth from Bankruptcy?," Discussion Paper 2010-118, Tilburg University, Center for Economic Research.
    8. Willis, Cleve E. & Crawford, Charles O., 1976. "Methodological Issues In Analyses Of Use And Adequacy Of Community Services In Rural Areas: With An Application To Legal Services In The Northeast," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 0(Number 2), pages 1-12, October.
    9. F.M. Dieleman & W.A.V. Clark & M.C. Deurloo, 1989. "A Comparative View of Housing Choices in Controlled and Uncontrolled Housing Markets," Urban Studies, Urban Studies Journal Limited, vol. 26(5), pages 457-468, October.
    10. Willis, Cleve E. & Crawford, Charles O., 1976. "Methodological Issues In Analyses Of Use And Adequacy Of Community Services In Rural Areas: With An Application To Legal Services In The Northeast," Journal of the Northeastern Agricultural Economics Council, Northeastern Agricultural and Resource Economics Association, vol. 5(2), pages 1-12, October.
    11. Goode, Frank M., 1981. "The Potential for Economic Development in Rural Communities in the Northeast," Journal of the Northeastern Agricultural Economics Council, Northeastern Agricultural and Resource Economics Association, vol. 10(2), pages 1-8, October.
    12. Henderson, Jason R. & McNamara, Kevin T., 2000. "The Location Of Food Manufacturing Plant Investments In Corn Belt Counties," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(2), pages 1-18, December.
    13. Stallmann, Judith I. & Johnson, Thomas G. & Mwachofi, Ari & Flora, Jan L., 1993. "Labor Market Incentives To Stay In School," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 25(2), pages 1-13, December.
    14. Thomas J. Miceli, 1989. "Housing Rental Contracts and Adverse Selection with an Application to the Rent‐Own Decision," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 17(4), pages 403-421, December.
    15. ÇAGLAYAN, Ebru & UN, Turgut, 2012. "Heteroscedastic Probit Model: An Application Of Home Ownership In Turkey," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 12(2).
    16. Dayton M. Lambert & Kevin T. McNamara, 2009. "Location determinants of food manufacturers in the United States, 2000–2004: are nonmetropolitan counties competitive?," Agricultural Economics, International Association of Agricultural Economists, vol. 40(6), pages 617-630, November.
    17. Leuck, Dale J., 1979. "An Econometric Model Of Manufacturing Employment Growth In Rural Tennessee Counties From 1962 To 1976," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 11(2), pages 1-5, December.
    18. Dries, Liesbeth & Pascucci, Stefano & Gardebroek, Cornelis, 2011. "Pluriactivity in Italian Agriculture: Are Farmers Using Interlinked Strategies?," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114429, European Association of Agricultural Economists.
    19. Jaibi, M. Raouf & ten Raa, Thijs, 1998. "The additive structure of utility in discrete choice models," Regional Science and Urban Economics, Elsevier, vol. 28(1), pages 91-101, January.
    20. Fletcher, Stanley M. & McWatters, Kay H. & Resurreccion, Anna V.A., 1990. "Analysis Of Consumer'S Willingness To Pay For New Fried Food Prepared From Cowpea Flour," Working Papers 115909, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:jagaec:v:12:y:1980:i:02:p:65-69_01. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/aae .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.