In examining the determinants of income, data were collected regarding the characteristics of 45 adults, and the regression ln Y = β 0 + β 1 ln X 1 + β 2 ln X 2 + β 3 X 3 + ε was used, where Y is the annual income (in thousands of dollars), X 1 is the adult's age, X 2 is his/her years of education, and X 3 is a dummy
variable = 1 and is used if the adult is female. You run the regression and obtain the equation
ln = 6.3 + 0.91 ln x 1 + 1.3 ln x 2 - 0.05 x 3 .
How would you interpret the coefficient on age?

Question

In examining the determinants of income, data were collected regarding the characteristics of 45 adults, and the regression ln Y  =  β 0   +  β 1   ln X 1   +  β 2   ln X 2   +  β 3 X 3   + ε was used, where  Y  is the annual income (in thousands of dollars),  X 1   is the adult's age,  X 2   is his/her years of education, and  X 3   is a dummy  
 variable = 1 and is used if the adult is female. You run the regression and obtain the equation  
 ln    = 6.3 + 0.91 ln x 1   + 1.3 ln  x 2   - 0.05 x 3 . 
   How would you interpret the coefficient on age?

Answer

As the person's age increases, their income at first increases, then eventually decreases.

Answer

As the person's age increases, their income increases at a decreasing rate.

Answer

As the person's age increases, their income at first decreases, then eventually increases

Answer

As the person's age increases, their income increases at an increasing rate.

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In examining the determinants of income, data were collected regarding the chara...

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