2.3. Problems with Ordinary Linear Regression

Not so long ago, it was common to see published research that used ordinary least squares (OLS) linear regression to analyze dichotomous dependent variables. Some people didn’t know any better. Others knew better but didn’t have access to good software for alternative methods. Now, virtually every major statistical package includes procedures for logit or probit analysis, so there’s no excuse for applying inferior methods. No reputable social science journal would publish an article that used OLS regression with a dichotomous dependent variable.

Should all the earlier literature that violated this prohibition be dismissed? Actually, most applications of OLS regression to dichotomous variables give ...

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