# Natural log of annual income [duplicate]

What is the reason for taking the natural logarithm of annual income, my outcome variable, instead of just leaving the variable as it is?

What relationship would I be linearizing if I took the ln of the annual income? The relationship with the annual income and the number of people who reported a certain income or the relationship that of my independent variables with the outcome variable ln annual income?

Why take the ln of annual income?

## marked as duplicate by whuber♦Jun 5 '13 at 20:49

If a guy making \$30,000 per year is given a \$ 5,000 raise, he's happy. If a guy making \$300,000 per year is given a \$ 5,000 raise, he's insulted.