* The relationship between natural log (LOG) and logarithm to * the base 10 (LOG10) is: LOG(x) = 2.3026 LOG10(x) * This example compares the results of: * (1) a regression with all variables transformed to * logarithm to the base 10. * (1) a regression with all variables transformed to * natural logarithms. * Load the Theil textile test data set * Henri Theil, Principles of Econometrics, Wiley, 1971. DEMO * Generate common logarithms - logarithms to the base 10. GENR LCON=LOG(CONSUME)/2.3026 GENR LINC=LOG(INCOME)/2.3026 GENR LPRICE=LOG(PRICE)/2.3026 * OLS regression - Theil, Equation (3.18), p. 116. OLS LCON LINC LPRICE * The estimates of the slope coefficients are identical * to using natural logarithms. * Generate natural logarithms GENR LCON=LOG(CONSUME) GENR LINC=LOG(INCOME) GENR LPRICE=LOG(PRICE) OLS LCON LINC LPRICE STOP