where F—1 is the inverse of the normal CDF. What all this means can be made clear from Figure 15.4. In panel a of this figure we obtain from the ordinate the (cumulative) probability of owning a house given I* < Ii, whereas in panel b we obtain from the abscissa the value of Ii given the value of Pi, which is simply the reverse of the former.

But how do we actually go about obtaining the index Ii as well as estimating ft1 and ft2? As in the case of the logit model, the answer depends on whether we have grouped data or ungrouped data. We consider the two cases individually.

Pi = F(Ii) i


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Rules Of The Rich And Wealthy

Rules Of The Rich And Wealthy

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