Hi everybody,
I have to run a regression with a dummy variable as response variable and a vector of regressors. My question is the following: is totally uncorrect to apply the OLS method in the presence of binary dependent variables? From what I've studied in my econometrics courses, the answer would be yes. However, I was told by my new professor that OLS can be used even in these cases and produces good estimates. I am a bit confused.
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