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A new measure of fit for equations with dichotomous dependent variables


Abstract: The econometrics literature contains many alternative measures of goodness of fit, roughly analogous to R2, for use with equations with dichotomous dependent variables. There is, however, no consensus as to the measures' relative merits or about which ones should be reported in empirical work. This paper proposes a new measure that possesses several useful properties that the other measures lack. The new measure may be interpreted intuitively in a similar way to R2 in the linear regression context.

Keywords: Econometric models;

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Provider: Federal Reserve Bank of New York

Part of Series: Research Paper

Publication Date: 1997

Number: 9716