Question
You want to estimate the effect of a city's having high-speed rail on their GDP per capita, and you want to look at the change
You want to estimate the effect of a city's having high-speed rail on their GDP per capita, and you want to look at the change in percent terms. High-speed rail is represented by a dummy variable equal to 1 if the city has high-speed rail and 0 if they don't. What should you do with your regression?
(A) Log the high-speed rail variable.
(B) Log the GDP per capita variable.
(C) Log both the high-speed rail variable and the GDP per capita variable.
(D) Include a quadratic term on the RHS of the regression.
(E) Include an interaction term on the RHS of the regression.
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