You have estimated a model of two variables related such that ln(y)= 17.3 - .04 x
If x decreases by 2 units,what is the expected change in y?
A)y decreases by .08 units.
B)y increases by 8 percent.
C)y increases by 4 units
D)y decreases by 8 percent.

Question

Quizplus · Accepted Answer

Given the model ln(y) = 17.3 - .04x, a decrease in x by 2 units leads to an increase in ln(y) by 0.08 (since -.04 * -2 = 0.08). This implies y increases by approximately 8 percent, as a change in the natural log corresponds to a percentage change in the original variable.

You Have Estimated a Model of Two Variables Related Such