Re: st: When to use Log (1+x) Transformation?

["Song" <raravise@gmail.com>]

Thank you for your suggestion. I also want to look at the possibility of 
using an inverse hyperbolic sine transformation since time window includes 
actually some negative numbers.

Reo.

----- Original Message ----- 
From: "Maarten buis" <maartenbuis@yahoo.co.uk>
To: <statalist@hsphsun2.harvard.edu>
Sent: Sunday, April 06, 2008 3:00 PM
Subject: Re: st: When to use Log (1+x) Transformation?



> --- Song <raravise@gmail.com> wrote:
> > I plan to estimate the following model by 3SLS  (reg3).
> >
> > ln(Revenue in each country) = a0 + a1*time window + controls.
> > ln(time window) = b0 + b1*(expected) Revenue in each country +
> > controls.
> >
> > Time window is difference in launching time (in days) of a product
> > between the US and international launch. Both revenue and time window
> > are skewed, so I wanted to use log transformation. The problem is
> > that time window includes a lot of zeros, so I am not sure what is
> > the best method.
> One transformation you can use is the cube root:
> gen cr_time_widow = time_window^(1/3)
>
> An issue you might want to look into is that a zero time may be
> qualitatively different from the other values, but I don't know how to
> implement such a thing for a endogenous variable, except that I
> recommend that you take a very good look at the residuals.
>
> -- Maarten
>
> -----------------------------------------
> Maarten L. Buis
> Department of Social Research Methodology
> Vrije Universiteit Amsterdam
> Boelelaan 1081
> 1081 HV Amsterdam
> The Netherlands
>
> visiting address:
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>
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>
> http://home.fsw.vu.nl/m.buis/
> -----------------------------------------
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