✳flâneur — a map of the web's best reading

Functional form - Interpretation

cmapskm.ihmc.us · 312 words · saved by 1 readers

A functional form refers to the algebraic form of a relationship between a dependent variable and regressors or explanatory variables. The simplest functional form is the linear functional form, where the relationship between the dependent variable and an independent variable is graphically represented by a straight line. Other useful functional forms in regression analysis include: These functional forms allow the analyst to represent a wide range of shapes. The interpretation of coefficients is different in alternative functional forms. In the following formulations Y represents the dependent variable, x the independent variable, a is the y-intercept, b is the slope coefficient, ln(y) and ln(x) represent the natural logarithm of y and x, respectively. and e is an error term. (1) Linear: y = a + b x + e In this functional form b represents the change in y (in units of y) that will occurs as x changes one unit. (2) Semi-log: ln(y) = a + b x + e In this functional form b is interpreted

Functional form - Interpretation Functional form A functional form refers to the algebraic form of a relationship between a dependent variable and regressors or explanatory variables. The simplest functional form is the linear functional form, where the relationship between the dependent variable and an independent variable is graphically represented by a straight line. Other useful functional forms in regression analysis include: Semi-log. Either the dependent variable or the independent variables are transformed using the natural logarithm transformation. Double-log. Variables are transforme

Explore this link on the map →

related reading