st: Interpretation of Box-Cox Results

[Charalambos Karagiannakis <karagiannakis.charalambos@ucy.ac.cy>]

Dear Statalist users,

 

Hello. I run a Box-Cox transformation for only the dependent variable using the command boxcox and I would appreciate some help with the interpretation of the results.

The Box-Cox transform parameter ‘theta’ turns out to be very close to zero and statistical significant (namely, -0.0730 with a s.e. of 0.0091). However, at the bottom table where different null hypotheses for theta are tested, all three cases (H0:theta=-1, H0:theta=0, H0:theta=1) return a 0.000 p-value, rejecting all the possible specifications (reciprocal, log and linear specification respectively). How could one interpret this result?

 

Thank you in advance.

Harris Karagiannakis