log-linear least-squares method definition

log-linear least-squares method

Statistical technique for estimating straight-line (linear) relationships between two or more variables where a dependent variable is influenced by one or more independent variables. In this method, the data values are converted to their logarithms so that equal percentage changes have equal weight, and then a least-squares regression is applied. This method is employed in situations such as explaining why the differences in security returns occur due to differences in capitalization. Also called logarithmic transformation method.

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