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st: How to Interpret Coefficients when DV is square-rooted
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st: How to Interpret Coefficients when DV is square-rooted
Date
Tue, 2 Aug 2011 16:48:10 -0400
Dear Stata Listers
I am estimating turnover ratio using OLS. I found heteroskedasticity,
and as recommended in the textbook (Wooldridge, 2006) I transformed
turnover rates using square root.
After transformation, heteroskedsticity problem is solved. However,
the next problem occurs: how do I interpret the beta coefficients for
each independent variable?
If I square both sides, the equation in the right hand side becomes messy.
There are multiple recommendations to solve a heteroskedsticity
problem (such as using weighted least squares, or robust standard
error and so on), but I am now curious how to interpret coefficients
of independent variables when dependent variable is square rooted.
Thanks,
Sangyub
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