A study by Uyeno, Hamilton and Biggs (1993, Journal of Transport Economics and P

Question

A study by Uyeno, Hamilton and Biggs (1993, Journal of Transport Economics and Policy) estimated the effect of airport noise on residential property values. They estimated the following equation: ln H = b_0 + b_1 NEF + sigma b_i ln X_i + u where: ln H - log of property value H b0 - a constant term b1 - noise coefficient bi - coefficient of ith variable NEF - measure of noise level u - error term a. The estimated value of b1 is -0.0065. Interpret this coefficient b. Suppose that the estimated equation is in log-log form and b1 = -0.0065. ln H = b_0 + b_1 ln NEF + sigma b_i ln X_i + u What is the interpretation of b1 in this case?

Explanation / Answer

Part-a

In log-level form this indicate that corresponding to unit increase in NEF there is 0.65% decrease in property value

Part-b

In log-log form this indicate that corresponding to 1% increase in NEF there is 0.0065% decrease in property value

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.