Chapter 1: check

Question 1

log-log model:

Answer 1

ln(y)=Beta0+Beta1*ln(x)+u

When x increases by 100%
-> ln(x) increases by 1 unit
-> ln(y) increases by Beta1 units
= y increases by Beta1*100%.

Question 2

log-level model:

Answer 2

ln(y)=Beta0+Beta1*x+u

When x increases by 1 unit
-> ln(y) increases by Beta1 units
= y increases by Beta1*100%.

Question 3

level-log model:

Answer 3

y=Beta0+Beta1*ln(x)+u

When x increases by 100%

• > ln(x) increases by 1
• > y increases by Beta1 units

Question 4

STATA:

Answer 4

regression of y on x: reg y on x

Question 5

Interpretation of a slope coefficient:

Answer 5

One more of x, on average leads ceteris paribus to Beta1 increase in y.