Hi Statalist, this is my first post so apologies if the format is wrong.
I have an explanatory variable in log format ln(income) and the dependent variable, y, is a dummy variable (and 74% of observations are y=1).
I initially use a linear probability model and the coefficient on ln(income) is 0.00875. I have interpreted this as: the probability of y=1 associated with a 1% increase in income is a 0.0000875% point increase (basically no effect)
The marginal effect at means on the probit model on ln(income) is 0.00907. I have interpreted this as: the probability of y=1 associated with a 172% increase in income is a 0.00907% point increase.
Therefore, the probability of y=1 associated with a 1% increase in income is a 0.00907/172= 0.000053% point increase (basically no effect).
I was wondering if this is the right interpretation and if so, should I just say there is no effect of household income on y=1?
Many thanks in advance, I really appreciate it.
I have an explanatory variable in log format ln(income) and the dependent variable, y, is a dummy variable (and 74% of observations are y=1).
I initially use a linear probability model and the coefficient on ln(income) is 0.00875. I have interpreted this as: the probability of y=1 associated with a 1% increase in income is a 0.0000875% point increase (basically no effect)
The marginal effect at means on the probit model on ln(income) is 0.00907. I have interpreted this as: the probability of y=1 associated with a 172% increase in income is a 0.00907% point increase.
Therefore, the probability of y=1 associated with a 1% increase in income is a 0.00907/172= 0.000053% point increase (basically no effect).
I was wondering if this is the right interpretation and if so, should I just say there is no effect of household income on y=1?
Many thanks in advance, I really appreciate it.
