Date of Award
Master of Science (MS)
Economics and Finance
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.
Reasch, Nate Rex, "Bayesian Inference: Probit and Linear Probability Models" (2014). All Graduate Plan B and other Reports. 391.
Copyright for this work is retained by the student. If you have any questions regarding the inclusion of this work in the Digital Commons, please email us at .