The economist sees your analysis of the relationship between GDP per capita and greenhouse gas emissions per capita. She asks you to explore alternative functional forms for this relationship. Using the subset of countries from the World Development Indicators database I have provided you, I have estimated the following equations:
A linear relationship: Eˆ = 6.464 + 0.176 GDP/cap
A linear-log relationship: Eˆ = 4.046 + 2.655 log(GDP/cap)
A log-log relationship: log(Eˆ) = 1.191 + 0.364 log(GDP/cap)
(i) Interpret the parameter on GDP per capita (or log(GDP per capita)) in each of these equations.
(ii) What are predicted greenhouse gas emissions (metric tons per capita) for a country with a GDP per capita of $10,000 with each of the models?