Re: st: RE: Mean test in a Likert Scale

[Nick Cox <njcoxstata@gmail.com>]

I don't prescribe or proscribe. If a predictor is ordinal, I'd guess
that using indicator variables is most likely to be the best strategy.
But I don't rule out, a priori or even prima facie or ex cathedra,
that entering an ordinal variable "as is" might work well. Or even
that there is a case for using both the predictor and a set of
indicator variables.

Similarly, how to treat something measured in US dollars is not
something laid down in advance. It's most likely that I would want to
transform it.

I don't believe, by the way, that "anything goes" in data analysis,
but on this point I think flexibility scores over dogmatism.

Nick

On Mon, Sep 3, 2012 at 3:54 PM, Yuval Arbel <yuval.arbel@gmail.com> wrote:
> Nick and Maarten, Note, that Kmenta's message is to prefer models with
> less restrictions.
>
> Moreover, are you suggesting we can deal in the same manner with
> quantitative values and ordinal variables? if our independent
> variables are  what subjects marked on a questionnaire on a scale
> between 1 to 5 is  the statistical treatment within a regression
> analysis framework should be identical to an independent variable
> measured in US dollars?
>
> On Mon, Sep 3, 2012 at 2:27 AM, Maarten Buis <maartenlbuis@gmail.com> wrote:
>> On Mon, Sep 3, 2012 at 11:01 AM, Nick Cox wrote:
>>> Econometricians' practice seems almost invariably looser than that --
>>> and a good thing too -- although the idea that an analysis is correct
>>> or incorrect, and no shades of grey, still seems pervasive.
>>
>> What amuses me are the occasional reference to "correct models", which
>> is just a contradiction in terms. A model is by definition a
>> simplification of reality, and simplifying reality is really central
>> to what a model is. If reality where so simple we could understand it
>> without simplification we would not need a model. However,
>> simplification is just another word for "wrong in some useful way". So
>> a correct model either does not simplify and is thus not a model, or
>> it is not as correct as the author thinks it is.
>>
>> -- Maarten
>>
>> ---------------------------------
>> Maarten L. Buis
>> WZB
>> Reichpietschufer 50
>> 10785 Berlin
>> Germany
>>
>> http://www.maartenbuis.nl
>> ---------------------------------
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>
>
>
> --
> Dr. Yuval Arbel
> School of Business
> Carmel Academic Center
> 4 Shaar Palmer Street,
> Haifa 33031, Israel
> e-mail1: yuval.arbel@carmel.ac.il
> e-mail2: yuval.arbel@gmail.com
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