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Characteristics of Dichotomous Variable Estimators

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Effective Investments on Capital Markets

Part of the book series: Springer Proceedings in Business and Economics ((SPBE))

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Abstract

The article covers the following probability models used in dichotomous variable analysis: logit, probit, and raybit—the last one proposed by the author. In the article, the following characteristics of estimators are derived: bias, variance, and mean squared error, which links them. The method of probability estimation which minimizes relative root mean squared error (RRMSE) is proposed. It is also shown that the goodness-of-fit measures of mean square error (MSE) and mean absolute error (MAE) models present in the field literature lead to the similar results.

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Author information

Authors and Affiliations

  1. Faculty of Electrical Engineering, West Pomeranian University of Technology, Szczecin, Poland

    Jan Purczyński

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  1. Jan Purczyński
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Correspondence to Jan Purczyński .

Editor information

Editors and Affiliations

  1. Department of Insurance and Capital Markets, University of Szczecin, Szczecin, Poland

    Waldemar Tarczyński

  2. Institute of IT in Management, University of Szczecin, Szczecin, Poland

    Kesra Nermend

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Purczyński, J. (2019). Characteristics of Dichotomous Variable Estimators. In: Tarczyński, W., Nermend, K. (eds) Effective Investments on Capital Markets. Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-030-21274-2_21

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