It would be appreciated if you provide me with complete clarification for the be

Question

It would be appreciated if you provide me with complete clarification for the below questions

- what is the different between logarithms regressions and where we can apply these models through economic theory. and please explain how we can know the elasticity from these models.

- what is the meaning of logarithms regressions and how we can benefit from it.

- How you interpret the logarithms regressions . please give me an example.

- how we can judge directly for the significant of the relation through t value or p value.

- Please explain the RECIPROCAL MODELS

Explanation / Answer

logarithms regressions : One or more variables is transformed into logarithmic and run regression on the transformed variable.

ln(Y)=B0 + B1*X + u

ln(Y)=B0 + B1*ln(X)

Interpretation :

ln(Y)=B0 + B1*X + u

A change in X by one unit (X=1) is associated with a (exp(B1) - 1)*100 % change in Y

ln(Y)=B0 + B1*ln(X) + u

A 1% change in X is associated with a B1% change in Y, so B1 is the elasticity of Y with respect to X.

If p- value is less than 0.05, then we say that the variables is significant.

RECIPROCAL MODELS : In this case the variables are transformed into their reciprocals and regression is performed on transformed variables.

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.