If you are modeling shopping decisions at the grocery store, and construct an outcome variable that is coded as 0 for no soup purchases, 1 for soup purchased of only one brand, and 2 for soup purchase of multiple brands, it would be appropriate to model this outcome as limited dependent variable because the:
A) outcome variable is ordinal.
B) outcome variable is cardinal.
C) range of possible values has consequential constraints.
D) variable is dichotomous.

Question

Quizplus · Accepted Answer

The range of possible values has consequential constraints because the outcome variable is ordinal and has a limited number of possible values (0, 1, or 2). This means that the outcome variable cannot take on any value between 0 and 1 or between 1 and 2, which would be necessary if the outcome variable were cardinal.

If You Are Modeling Shopping Decisions at the Grocery Store