Question

Consider an estimated multiple regression model as given below.

log(y)ˆ=3.45+0.12log(x1)−0.42x2+0.36x3

Which of the following statements is correct in relation to the above estimated model?

1. If x_³ increases by 1 unit, y declines by 0.36

2. If x_² falls by 2 per cent, log(y) decreases by 42percent
3. When the values of x_¹, x_² and x_³ are three, the predicted value of y is 5.2

4. f x_¹ increases by 1 percent, y rises by 0.12 percent

Answer 1

we have give

log(y)ˆ=3.45+0.12log(x1)−0.42x2+0.36x3

1. this is false that If x3 increases by 1 unit, y declines by 0.36 because If x3 increases by 1 unit, y increase by 0.36

2. this is false that If x2 falls by 2 per cent, log(y) decreases by 42 percent
3. this is false that  When the values of x1, x2 and x3 are three, the predicted value of y is 5.2

4. this is true that if x1 increases by 1 percent, y rises by 0.12 percent beacuse it is true interpretation of variable x1

so optio 4 is right choice