Dear colleagues,
I am running a regression in which I have the following regression
FoodExp = 67.04 DepRatio +.....e
My interest is in the interpretation of the coefficient on the dependency ratio since the ratio falls between 0 and 1. Would I be correct to say a 1% increase in the dependency ratio increases food expenditure by K67.04? kindly help me out
Well, (67.04)(0.01)(DepRatio) is 0.6704DepRatio, whatever that might be. Since your independent variable here is a ratio, that would complicate interpretation, depending upon whether or not those variables can change independently. Also, the results may differ greatly depending upon whether the other 'independent' variables are collinear with DepRatio (which is generally a matter of degree), and other complicating relationships. Consider this: Does changing DepRatio likely result in any change to other variables?
So, I think you may find that the relationship you seek is not so clear, but I suppose that you might be able to use 0.6704DepRatio as a rough guess at the change. But I suspect that if your software gives you a standard error for DepRatio, it is an underestimate of the uncertainty. There would be bias, I think.
Thank you very much for your response... I have other independent variables in the equation but I don't just understand the interpretation of this particular variable.
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