Question: Download the EDSAL.csv file (https://www.dropbox.com/s/gdwpbkdw72oq4mm/EDSAL.csv) ) and upload to a dataframe in R . The three variables are Education, Experience and Salary. > EDSAL =

Download the EDSAL.csv file (https://www.dropbox.com/s/gdwpbkdw72oq4mm/EDSAL.csv)

) and upload to a dataframe in R . The three variables are Education, Experience and Salary.

> EDSAL = read.csv("EDSAL.csv", header = TRUE)

Run 4 linear regressions using the lm function in R. ( you have to use the natural log)

  • Lin-Lin: Use Salary as the dependent variable and Experience as the independent variable.
  • Lin-Log: Use Salary as the dependent variable and log(Experience) as the independent variable.
  • Log-Lin: Use log(Salary) as the dependent variable and Experience as the independent variable.
  • Log-Log: Use log(Salary) as the dependent variable and log(Experience) as the independent variable.

For which of following situations are we most likely to consider log transformation?

1)Heteroscedasticity (non-constant variance) is observed in original model

2)Dependent and independent variables have linear relationship

3)Dependent and independent variables follow normal distribution

4)High R-squared score is observed in original model

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