Observation: A model of the form ln y = βx + δ is referred to as a log-level regression model. e β, we note that an increase in x of 1 unit results in y being multiplied by e β.This equation has the form of a linear regression model (where I have added an error term ε): Taking the natural log (see Exponentials and Logs) of both sides of the equation, we have the following equivalent equation: In particular, we consider the following exponential model: Sometimes linear regression can be used with relationships that are not inherently linear, but can be made to be linear after a transformation.
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