Question: Using your EAEF data set, evaluate whether the dependent variable of an earnings function should be linear or logarithmic. Calculate the geometric mean of EARNINGS

Using your EAEF data set, evaluate whether the dependent variable of an earnings function should be linear or logarithmic. Calculate the geometric mean of EARNINGS by taking the exponential of the mean of LGEARN. Define EARN STAR by dividing EARNINGS by this quantity and calculate LGEARNST as its logarithm. Regress EARNSTAR and LGEARNST on Sand EXPand compare the residual sums of squares.

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