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Introductory EconometricsIntuition, Proof, and Practice$
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Jeffrey Zax

Print publication date: 2011

Print ISBN-13: 9780804772624

Published to Stanford Scholarship Online: June 2013

DOI: 10.11126/stanford/9780804772624.001.0001

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Categorical Dependent Variables

Categorical Dependent Variables

Chapter:
(p.582) Chapter 15 Categorical Dependent Variables
Source:
Introductory Econometrics
Publisher:
Stanford University Press
DOI:10.11126/stanford/9780804772624.003.0015

The previous chapters focused on how one or more explanatory variables contributed to the value of a dependent variable. It was assumed that the dependent variable was continuous and reported with precision. However, this is not the case for all dependent variables. Suppose the outcome in which we are interested is not continuous or, at least, is not measured continuously. How can we identify the extent to which such outcomes depend on their determinants? This chapter introduces methods that can be used for this purpose. The dependent variables of interest here are categorical rather than continuous. Their outcomes are categories, such as employed or not employed, a college graduate or not a college graduate, a union member or not a union member, rather than quantities. These dependent variables are also discrete because their possible outcomes are distinct from each other in character rather than varying in quantity alone.

Keywords:   regression analysis, explanatory variables, dependent variables, categories

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