Hello all,
I am estimating a first differences model of the following form ΔYit = ß0 + ß1ΔXit + ɛit.
In one of the regressions estimated, the dependent variable is wages. As I am more interested in the percentage change than the level change, I want to use the logarithm for the dependent variable.
Do I have to use log(wageit+1 - wageit) or log(wageit+1) - log(wageit) as my dependent variable?
Thank you!
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