Limited dependent variable
A limited dependent variable is a variable whose range of
possible values is "restricted in some important way." In econometrics, the term is often used when
estimation of the relationship between the limited dependent variable
of interest and other variables requires methods that take this
restriction into account. For example, this may arise when the variable
of interest is constrained to lie between zero and one, as in
the case of a probability, or is constrained to be positive,
as in the case of wages or hours worked.
Limited dependent variable models include:
