Date of Award
5-2014
Degree Type
Report
Degree Name
Master of Science (MS)
Department
Economics and Finance
Committee Chair(s)
Tyler Brough
Committee
Tyler Brough
Committee
Jason Smith
Committee
Alan Stephens
Abstract
The following paper analyzes the benets of Bayes' theorem in applied econo- metrics. This is accomplished by demonstrating each step in conducting Bayesian inference. This includes the prior selection, the likelihood function, posterior simula- tion, and model diagnostics. To provide a concrete example I replicate, by Bayesian inference, the main model of Blau, Brough, and Thomas.(2013) This model is found in their research paper titled, Corporate lobbying, Political Connections, and the Bailout of Banks. The analysis focuses on two dierent forms of limited dependent variable regressions, the probit and linear probability model. The benets of Bayesian econo- metrics were extensive and serve as a testament to Bayesian methodology.
Recommended Citation
Reasch, Nate Rex, "Bayesian Inference: Probit and Linear Probability Models" (2014). All Graduate Plan B and other Reports, Spring 1920 to Spring 2023. 391.
https://digitalcommons.usu.edu/gradreports/391
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