Question: based on this table. Linear Yi = 0 + 1Xi + i If X increases by one unit, Y will change by 1 units. Double-log
based on this table. Linear Yi = 0 + 1Xi + i If X increases by one unit, Y will change by 1 units. Double-log InYi = 0 + 1 inXi + i If X increases by one precent, y will change by 1 percent. (Thus 1 is the elasticity of y with respect to X.) Semilog(lnX) Yi = 0 + 1 inXi + i If X increases by one percent, Y will change by 1/100 units. Semilog (lnY) InYi = 0 + 1Xi + i If X increases by one unit, Y will change by roughly 100 1 percent. polynomial Yi = 0 + 1X i+ 2xi2 + i If X increases by one unit, Y will change by (1 + 22x) units. Which model is the right choice if theory suggests that a percent increase in X should cause an absolute size increase in Y
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