For the model ln(y)= β₀ + β₁ln(x)+ ε with 0

Name: For the model ln(y)= β 0 + β 1 ln(x)+ ε with 0 1 < 1,if x increases than E(y)increases but at a slower rate.
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Question

For the model ln(y)= β₀ + β₁ln(x)+ ε with 0 < β₁ < 1,if x increases than E(y)increases but at a slower rate.

Quizplus · Accepted Answer

Because the coefficient β₁ is less than 1, the increase in ln(x) will result in a proportional increase in ln(y) but at a slower rate. Therefore, as x increases, E(y) will increase but at a slower rate than the increase in x.

For the Model Ln(y)= β0 + β1ln(x)+ ε with 0

For the Model Ln(y)= β₀ + β₁ln(x)+ ε with 0