I don't think there is an easy quick fix
in this situation. log(variable + fudge)
in my view creates as many problems as it
solves.
What sometimes help is to use -glm- with
say -link(log)-. The crucial detail is that
-glm- does _not_ depend on log(observed)
being determinate. That is relevant if inflation
rate is your response variable.
Nick
[email protected]
[email protected]
> this one is probably a softball for most of you - but is
> there any smart
> mathematical transformation in STATA that allows me to deal with the
> problem of outliers while keeping the distances between the
> values of my
> variable in proportion.
>
> The variable I would like to transform contains annual inflation rates
> ranging from -30.2 to 23773 so taking LNs does not work because of the
> negative values. I thought about simply adding 30.2 to each
> value and then
> taking the LNs, but I am not quite sure if this is a legitimate way of
> dealing with my problem.
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