The interpretation of the slope coefficient in the model ln(Y_i)= β₀ + β₁X_i + u_i is as follows: A)a 1% change in X is associated with a β₁% change in Y. B)a change in X by one unit is associated with a 100 β₁% change in Y. C)a 1% change in X is associated with a change in Y of 0.01 β₁. D)a change in X by one unit is associated with a β₁ change in Y.

Question

Quizplus · Accepted Answer

In a model where the dependent variable Y is log-transformed, the coefficient β on an independent variable X (not log-transformed) implies that a one-unit change in X is associated with a (100*β)% change in Y. This is because the interpretation of coefficients in a log-linear model is in percentage terms, and multiplying by 100 converts the log difference into a percentage change.

The Interpretation of the Slope Coefficient in the Model Ln(Yi)=

The Interpretation of the Slope Coefficient in the Model Ln(Y_i)=