Question: note log and ln both denote the natural logarithm question...
Note: “Log” and “Ln both denote the natural logarithm
Question 2: Suppose you would like to allow for decreasing marginal returns of college education on annual savings in Question 1. What model can you use?
For reference, Question 1 is
The following regression is used to determine the annual savings of individuals on the basis of income and education:
Annual_savings = β0 + β1*college_education + β2* income +u
Edu takes on the value of 1 if the person has a college degree, otherwise zero. What can you say about the impact of education if β1 >0?