2009_ECON0701_tutorial_2_(extra_slides)

2009_ECON0701_tutorial_2_(extra_slides) - TO INTERPRET...

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Unformatted text preview: TO INTERPRET COEFFICIENTS OF DIFFERENT REGRESSION MODELS a) Level-level Model True Model: y 0 1 x E ( y | x) 0 1 x 0 E ( y | x 0) 1 dE ( y | x) dx For 1 unit increase in x, expected y changes by 1 . b) Log-level Model True Model: ln y 0 1 x E (ln y | x) 0 1 x 0 E (ln y | x 0) 1 dE (ln y | x ) dE ( y | x ) / E ( y | x ) %y 100 dx dx x => %y 1001x For 1 unit increase in x, expected y changes by 100 1 %. c) Level-log Model True Model: y 0 1 ln x E ( y | ln x) 0 1 ln x 0 E ( y | ln x 0) 1 dE ( y | ln x ) y y 100 d ln x %x 100 % x y => 1 %x 100 1 For 1 % increase in x, expected y changes by 100 . d) Log-log Model True Model: ln y 0 1 ln x E (ln y | ln x) 0 1 ln x 0 E (ln y | ln x 0) 1 dE (ln y | ln x ) dE ( y | x) / E ( y | x) % y 100 %y d ln x dx / x %x 100 % x For 1 % increase in x, expected y changes by 1 %. Population: Model: y 0 1 x Line: E ( y | x) 0 1 x Sample: Model: y 0 1 x Line: y 0 1 x ...
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2009_ECON0701_tutorial_2_(extra_slides) - TO INTERPRET...

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