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Marginal Effects in Probit Models: Interpretation and Testing

Marginal Effects in Probit Models: Interpretation and Testing

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Xi1, Xi2 and Xi3 are continuous explanatory variables Di is a binary (or dummy) explanatory variable defined such that Di = 1 if observation i exhibits some attribute, = 0 otherwise. • The index function is: 4 i3 5 i 6 i i3 2 0 1 i1 2 i2 3 i2 T xi β =β +βX +β X +βX +β X +βD +βD X ♦ Xi1 enters the index function linearly.

  Variable, Dummy, Marginal

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