Introductory Econometrics: A Modern Approach 6th Edition by Jeffrey M Wooldridge

Exercise 4

Let grad be a dummy variable for whether a student-athlete at a large university graduates in five years. Let hsGPA and SAT be high school grade point average and SAT score, respectively. Let study be the number of hours spent per week in an organized study hall. Suppose that, using data on 420 student-athletes, the following logit model is obtained:

(grad = 1|hsGPA,SAT,study) = ?(-1.17 + .24 hsGPA + .00058 SAT + .073 study),

where ?(z) = exp(z)/[1 + exp(z)] is the logit function. Holding hsGPA fixed at 3.0 and SAT fixed at 1,200, compute the estimated difference in the graduation probability for someone who spent 10 hours per week in study hall and someone who spent 5 hours per week.