Question: Suppose that log(Y ) = 0 + 1 log(X) + U where Y = the number of crimes committed in the town X = the

Suppose that log(Y ) = 0 + 1 log(X) + U where Y = the number of crimes committed in the town X = the number of police officers working in the town. You, the researcher, wish to interpret this regression as a causal model of the effect of X on Y . (a) How would you interpret 1? (Hint: You may need to use the chain rule.) (b) How would your answer to part (a) change if the model had been defined with X instead of log(X)?

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