Question

How to interpret coefficients in multi regression model like this? ln(PRICE) = β1 + β2SQFT +...

How to interpret coefficients in multi regression model like this?

ln(PRICE) = β1 + β2SQFT + β3AGE + β4AGE^2 + ε

Homework Answers

Answer #1

This is log linear model , where dependent variable takes the form of LOG function and independent variables are unchanged , means as usual as are they .

B2 interpretation -This means that 1 unit rise in SQFT lead to B2 percentage change in price  , keeping other factors constant .

B3 interpretation -This means that 1 Year rise in AGE lead to B3 percentage change in price  , keeping other factors constant .

B4 interpretation -This means that 1 Year  rise in AGE ^2 lead to B2 percentage change in price  , keeping other factors constant .

B1 interpretation - This means that at zero level of all coefficients , still there is a price exist that is B1 .

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