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st: RE: Transform variable plagued by outliers


From   "Nick Cox" <n.j.cox@durham.ac.uk>
To   <statalist@hsphsun2.harvard.edu>
Subject   st: RE: Transform variable plagued by outliers
Date   Mon, 16 Feb 2004 17:15:50 -0000

I don't think there is an easy quick fix
in this situation. log(variable + fudge)
in my view creates as many problems as it 
solves. 

What sometimes help is to use -glm- with 
say -link(log)-. The crucial detail is that 
-glm- does _not_ depend on log(observed) 
being determinate. That is relevant if inflation 
rate is your response variable. 

Nick 
n.j.cox@durham.ac.uk 

Jens_Hainmueller@ksg05.harvard.edu
 
> 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.

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