Suppose you have the following estimated regression equation: . Which of the following is a good interpretation of the estimated relationship between and ?
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1 markEconometricsDummy variables and functional formsLog, quadratic and other functional formsModerateabout 2 min
DSE 2011 Question 8: Dummy variables and functional forms
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Suppose you have the following estimated regression equation: ln Y=1.2+0.5X. Which of the following is a good interpretation of the estimated relationship between X and Y? (A) A unit change in X is associated with a 50 percent change in Y. (B) A unit change in X is associated with a 0.5 percent change in Y. (C) A one percent change in X is associated with a 50 unit change in Y. (D) A one percent change in X is associated with a 0.5 unit change in Y.
Dummy variables and functional forms has come up 20 times in 6 exams since 2011.
What this question tests
This question is on Log, quadratic and other functional forms, part of Dummy variables and functional forms in Econometrics.
Choosing and interpreting log-log, semi-log, quadratic and reciprocal specifications.
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