How are the assets and sales of major corporations related? The data set is the same as that for Exercise 2.44. The variable Banks in the data set is 1 for the banks and 0 for the other companies. As Exercise 2.44 showed, it is best to take the logarithm of most of these variables. Here are a scatterplot and a regression relating the logarithm of assets and the logarithm of sales. The banks are shown in red:

a) What is an appropriate interpretation of the coefficient of LogSales?
b) What is an appropriate interpretation of the coefficient of Banks?
c) Is the use of a variable such as Banks appropriate for these data?

Transcribed Image Text:

LAss 4.50 + 3.75 3.00 + 2.25 + 3.00 LSI + 3.75 4.50