The estimated slope coefficient (b)of the regression equation (Ln Y = a + b Ln X)measures the ____ change in Y for a one ____ change in X.
A) percentage,unit
B) percentage,percent
C) unit,unit
D) unit,percent
E) none of the above

Question

Quizplus · Accepted Answer

The estimated slope coefficient (b) in a log-log regression model (where both Y and X are logged) measures the percentage change in Y for a one percent change in X. This is because taking the natural log of the variables allows the coefficient to be interpreted as an elasticity, which is a percentage change in the dependent variable for a percentage change in the independent variable.

The Estimated Slope Coefficient (B)of the Regression Equation (Ln Y