Parameter Estimation and Evaluation Population and Distribution Model Population and Distribution Model Example 1(8.1)[Discrete Choice Probit and Logit Models] On 19 December 2018,$&P500 dropped 1.54%,the next day(20 December 2018),KLCI dropped 0.31%.The linear and logit regression model published on 14 December 2018(Read more here)predicted the KLCI would fall 0.37%and the chances of the drop are as high as 75%.This shows that the quantitative approach is indeed decent. Logit vs Profit Model(S&P500 Impact on KLCI) 09 Logit Probit 1 1 22 Probability=1+eo+) Probability e 2 dz 0.6 2πJ-0 0.5 0.2 0.2 15.0% 10.0% 50% 0.0% 50% 100w 15.w ◆一Logt一◆一升abt Chart shows the probability plot for both logit and probit models.Both models should give similar results. The slight difference is logit model has fatter tail. Parameter Estimation and Evaluation Introduction to Statistics and Econometrics April 21,2020 8/207Parameter Estimation and Evaluation Parameter Estimation and Evaluation Introduction to Statistics and Econometrics April 21, 2020 8/207 Population and Distribution Model Population and Distribution Model Example 1 (8.1) [Discrete Choice Probit and Logit Models] On 19 December 2018, S&P500 dropped 1.54%, the next day (20 December 2018), KLCI dropped 0.31%. The linear and logit regression model published on 14 December 2018 (Read more here) predicted the KLCI would fall 0.37% and the chances of the drop are as high as 75%. This shows that the quantitative approach is indeed decent. Chart shows the probability plot for both logit and probit models. Both models should give similar results. The slight difference is logit model has fatter tail