By subtracting Sales_t-1 from both sides? ln Sales_t=b0+b1 ln Sales _t-1 +e to end up with: ln Sales_t - ln Sales _t = b0 + b1 [ln Sales_t-1 - ln Sales_t-2) +e? Try it.
… in doing a straight subtraction, b0 should disappear, but looks like some details are skipped and we are supposed to assume that b0 remains! Not hard to remember, but I would like to know [after the exam :-)], how that’s possible.
you are not doing a direct subtraction there. 1. you are going to do the ln(sales_t)-ln(Sales_t-1) on the data points 2. you are going to do the ln(sales_t_1)-ln(Sales_t-2) on the data points then regress (1) against (2). you will end up with a new b0 and a new b1. does that make sense?
Right, but if you do straightforward subtraction, then you’ll have a problem.