You estimate the following relationship between household income and time spent working (in hours):
log(income_hat) = 30,000 + 2*timespent
How would interpret the coefficient on timespent?
A. Each additional hour is associated with a 0.2 percent increase in income.
B. Each additional hour is associated with a 20 percent increase in income.
C. Each additional hour is associated with a 20 percentage point increase in income.
D. Need more information on the units of the timespent variable.
Answer: B. Each additional hour is associated with a 20 percent increase in income.