The Housing Department of the Government wants to analyze the housing tenure decisions of the Spaniards to guide its future policies. They conduct a survey and ?nd that among the interviewed individuals either they rent a ?at, or buy a ?at, or buy a house. The Department asks you to estimate a model that could ?t this situation.
a) Do you think that a multinomial logit is a suitable model for this problem? Explain why.
b) Suggest some alternative(s) to the multinomial logit and explain why you select them.