Consider the following models: ln Y i = 1 + 2 ln X
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Consider the following models:
ln Y∗i = α1 + α2 ln X∗i + u∗i
ln Yi = β1 + β2 ln Xi + ui
where Y∗i = w1Yi and X∗i = w2Xi , the w’s being constants.
a. Establish the relationships between the two sets of regression coefficients and their standard errors.
b. Is the r2 different between the two models?
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a We can write the first model as ln w 1 Y i 1 2 lnw 2 X i u i ...View the full answer
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