RE: st: logit transformation of RHS variable

[Cameron McIntosh <cnm100@hotmail.com>]

I wouldn't transform it unless perhaps you have some serious ceiling or floor effects... as for different effects across the range of the predictor, you may want to consider adding nonlinear terms.Cam

----------------------------------------
> From: rl2240@columbia.edu
> Date: Wed, 4 Jan 2012 18:21:30 -0500
> Subject: st: logit transformation of RHS variable
> To: statalist@hsphsun2.harvard.edu
>
> Hello Statalisters,
> I have an independent variable that I believe that needs to be
> transformed because it's bounded between 0 and 1, and it's easier to
> go from 0 to .10 than say .80 to .90. My question is, can I use a
> logit transformation on this RHS variable (new_x = x / (1 - x)? Or are
> logits usually for LHS variables only?
>
> Some alternatives may be
> 1. Add a quadratic term, but this doesn't get the S-shape representing
> "easier to go from 0 to .10; harder to go from .80 to .90"
> 2. Add a lag term to control for value in the previous period (yes,
> this is panel data).
>
> Thanks!
> -Raymond
> ---
> Raymond Lim
> Research Coordinator
> Columbia Business School - Finance & Economics Division
> RL2240@columbia.edu
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