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st: Transform variable plagued by outliers


From   Jens_Hainmueller@ksg05.harvard.edu
To   statalist@hsphsun2.harvard.edu
Subject   st: Transform variable plagued by outliers
Date   Mon, 16 Feb 2004 10:07:37 -0500




Dear STATAlisters,

this one is probably a softball for most of you - but is there any smart
mathematical transformation in STATA that allows me to deal with the
problem of outliers while keeping the distances between the values of my
variable in proportion.

The variable I would like to transform contains annual inflation rates
ranging from -30.2 to 23773 so taking LNs does not work because of the
negative values. I thought about simply adding 30.2 to each value and then
taking the LNs, but I am not quite sure if this is a legitimate way of
dealing with my problem.

Thanks for your advice!

 Best,
Jens

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