You estimate the following relationship between a house's price and its number of bedrooms:
log price_hat = 12 + .3*bedrooms
How would interpret the coefficient on bedrooms?
A. Each additional bedroom is associated with a 0.3 percent increase in price.
B. Each additional bedroom is associated with a 30 percent increase in price.
C. Each additional bedroom is associated with a 30 percentage point increase in price.
D.Need more information on the units of the price variable.
Answer: B. Each additional bedroom is associated with a 30 percent increase in price.