How to Interpret Econometric Equation
log Wagei=α + B1log(Year Of Schooling)i +ε
log Wi = α + B1log(YOS)i +ε
B1 = 0.25
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log Wi = α + B1(YOS)i +ε
B1 = 0.25
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1 year increase in YOS will increased the individual wage by 25%.
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Wi = α + B1(YOS)i +ε
B1 = 0.25
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Wi = α + B1log(YOS)i +ε
B1 = 0.25
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1% increase in YOS will increased the individual wage by RM0.0025.
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Yi = α + β1X1i +β2lnX2i + β3X3i + ε
Total Expenditurei = α + β1Agei +β2ln(Income)i + β3Malei + ε
β1 = 202.10
β2 = -260.22
β3 = 1251
Dummy (Male = 1, Female = 0)
Interpretation 1:
One year increase in age will increased total expenditure by RM202.10.
Interpretation 2:
One percent increase in income will decrease the total expenditure by RM2.6022 (260.22/100)[Individual might saving].
Interpretation 3:
Male has RM1251 higher total expenditure than female. [If B3= -1251, male has RM1251 less expenditure than female]
lnYi = α + β1X1i +β2lnX2i + β3X3i + ε
ln(Total Expenditure)i = α + β1A(ge)i +β2ln(Income)i + β3(Male)i + ε
β1 =0.0419
β2 = -0.16
β3 =0.42
Dummy (Male = 1, Female = 0)
Interpretation 1:
One year increase in age will increased total expenditure by 4.19% (0.0419x100%).
Interpretation 2:
One percent increase in income will decrease the total expenditure by 0.16%[Individual might saving].
Interpretation 3:
Male has 42% (0.42x100%) higher total expenditure than female.
log Wagei = α + β1(Year of Schooling)i + ε
β1= 0.25
Interpretation
One year increase in year of schooling will increased the individual wage by 25%.
Wagei = α + β1(Year of Schooling)i + ε
β1= 0.25
Interpretation
One year of schooling increase will increased the individual wage by RM0.25. [If B1= 100.20, one year increase in schooling will increased individual wage by RM100.20]
Wagei = α + β1log(Year of Schooling)i + ε
β1= 0.25
Interpretation
One percent increase in year of schooling will increased the individual wage by RM0.0025(0.25/100).
