Figure 15 Probit model resultsa,b,c For a set of hypothetical individuals (table 1) a The pertains to the Given the use of indicator variables this represents the predicted probability of defaulting for a male, aged ‘constant’ value model’s constant term. between 15 24, with a financial literacy score of zero, a below year 12 education level, and a household income less than $20 000. b Each incremental change – represents the marginal effect of the given characteristic on the probability of defaulting, and the value is the actual predicted probability of defaulting for individual’s ‘end’ the individual. c ***, ** and * represent statistical significance at the 1, 5 and 10 per cent level respectively.
Figure 15 Probit model resultsa,b,c For a set of hypothetical individuals (table 1) a The ‘constant’ value pertains to the model’s constant term. Given the use of indicator variables this represents the predicted probability of defaulting for a male, aged between 15 – 24, with a financial literacy score of zero, a below year 12 education level, and a household income less than $20 000. b Each incremental change represents the marginal effect of the individual’s given characteristic on the probability of defaulting, and the ‘end’ value is the actual predicted probability of defaulting for the individual. c ***, ** and * represent statistical significance at the 1, 5 and 10 per cent level respectively.
superannuation-alternative-default-models-supplement.docx