This is the seventh in a series of lecture notes that, tied together in a manual, you might call “practical regression.” The purpose of these notes is to complement the theoretical content of most statistics texts with practical tips based on nearly three decades of experience of the author, along with over a hundred years experience of colleagues who have offered advice. As the title of the “practice of regression” suggests, these notes are a guide to a regression in practice. This paper explains how to choose between log and linear specification. The paper emphasizes the economic interpretation of a magazine model and how to interpret the regression coefficients in a log. The note concludes by explaining how to choose between linear and log specifications for econometric reasons, including an explanation of the Box-Cox test.
Source: Kellogg School of Management
Release: June 11, 2012. Prod #: KEL641-PDF-ENG
Practice Regression: Log vs Linear Solution Case Specifications