I have been assigned the following question
"On the basis of the Bank of England's 2013 survey of the Financial position of British households, given in the data file [households], examine the statistical and econometric relationships between household debt-to-income ratios and the respondents background characteristics, in particular: social grade; age-group; income; saving and housing tenure. Consider the importance of your results with respect to the impact on household debt-to-income ratios of: (a) an increase in interest rates; and (b) a fall in the rate of price inflation.
My question is is it valid to regress D/Y=f(Y,...) since Y appears on both sides? If not then what would be the way to deal with the problem. I thought perhaps loging the regression so that ln(D) can be regressed on ln(Y) so that an implicit relationship between D/Y and Y can be obtained after the regression.
Any help will be much appreciated.