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In the first regression the contemporaneous drop is 0.23. One period later the effect is
. In the second regression, the one period effect is 0.97. One
period later is the effect is
. Since the coefficients in a regression
with a lagged endogenous variable and serial correlation are biased, I’d go with the
( ) )
( ) ( ) 6. We can think of the underlying latent variable in the probit as being
The probability of being married changes nonlinearly, but in the same direction, as does the
latent variable. The marginal effect of education on the latent variable is 0.085...
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