Advanced Search
MyIDEAS: Login to save this paper or follow this series

Tests of Inference for Dummy Variables in Regressions with Logarithmic Transformed Dependent Variables

Contents:

Author Info

  • Jenny N. Lye
  • Joseph G. Hirschberg

Abstract

The interpretation of dummy variables in regressions where the dependent variable is subject to a log transformation has been of continuing interest in economics. However, in the main, these earlier papers do not deal with the inferential aspects of the parameters estimated. In this paper we compare the inference implied by the hypotheses tested on the linear parameter estimated in the model and the tests applied to the proportional change that this parameter implies. An important element in this analysis is the asymmetry introduced by the log transformation. Suggestions are made for the appropriate test procedure in this case. Examples are presented from some common econometric applications of this model in the estimation of hedonic price models and wage equations.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.economics.unimelb.edu.au/downloads/wpapers-02/852.pdf
Our checks indicate that this address may not be valid because: 404 Not Found (http://www.economics.unimelb.edu.au/downloads/wpapers-02/852.pdf [301 Moved Permanently]--> http://fbe.unimelb.edu.au/economics/downloads/wpapers-02/852.pdf). If this is indeed the case, please notify (Aminata Doumbia)
Download Restriction: no

Bibliographic Info

Paper provided by The University of Melbourne in its series Department of Economics - Working Papers Series with number 852.

as in new window
Length: 17 pages
Date of creation: 2002
Date of revision:
Handle: RePEc:mlb:wpaper:852

Contact details of provider:
Postal: Department of Economics, The University of Melbourne, 4th Floor, FBE Building, Level 4, 111 Barry Street. Victoria, 3010, Australia
Phone: +61 3 8344 5355
Fax: +61 3 8344 6899
Email:
Web page: http://www.economics.unimelb.edu.au
More information through EDIRC

Related research

Keywords: Hypothesis tests; lognormal distribution; measures of proportional change; wage equation; hedonic price model;

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Bartik, Timothy J. & Smith, V. Kerry, 1987. "Urban amenities and public policy," Handbook of Regional and Urban Economics, in: E. S. Mills (ed.), Handbook of Regional and Urban Economics, edition 1, volume 2, chapter 31, pages 1207-1254 Elsevier.
  2. Hayes, K.J. & Hirschberg, J. & Lye, J. & Taylor, L.L., 1999. "Multivariate Generated Regressors and Heteroskedasticity in a Cross-Section: an Application to the Value of Neighborhood Schools," Department of Economics - Working Papers Series 692, The University of Melbourne.
  3. Giles, David E. A., 1982. "The interpretation of dummy variables in semilogarithmic equations : Unbiased estimation," Economics Letters, Elsevier, vol. 10(1-2), pages 77-79.
  4. Jeff Borland & Joseph Hirschberg & Jenny Lye, 2004. "Computer knowledge and earnings: evidence for Australia," Applied Economics, Taylor & Francis Journals, vol. 36(17), pages 1979-1993.
  5. Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-75, June.
  6. Hirschberg, J. & Lye, J.N., 1999. "Wages and Alcohol Consumption, Smoking, Weight Gain and Exercising: Evidence on Australian Men and Women," Department of Economics - Working Papers Series 684, The University of Melbourne.
  7. Kennedy, Peter E, 1981. "Estimation with Correctly Interpreted Dummy Variables in Semilogarithmic Equations [The Interpretation of Dummy Variables in Semilogarithmic Equations]," American Economic Review, American Economic Association, vol. 71(4), pages 801, September.
  8. Suits, Daniel B, 1984. "Dummy Variables: Mechanics v. Interpretation," The Review of Economics and Statistics, MIT Press, vol. 66(1), pages 177-80, February.
  9. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Patrick Georges & Aylin Seçkin, 2012. "Auction Prices of Classical Music Manuscripts – A Hedonic Approach," Working Papers 1202E, University of Ottawa, Department of Economics.
  2. Patrick Georges & Aylin Seçkin, 2013. "Black notes and white noise: a hedonic approach to auction prices of classical music manuscripts," Journal of Cultural Economics, Springer, vol. 37(1), pages 33-60, February.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:mlb:wpaper:852. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Aminata Doumbia).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.