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RE: st: RE: ln1=0 for missing values

From   "Nick Cox" <>
To   <>
Subject   RE: st: RE: ln1=0 for missing values
Date   Wed, 21 Apr 2004 13:52:55 +0100

I am not an expert on Tobit, or even a user of it. But 
there is surely folklore on this problem, which sounds as 
if it could arise frequently. 

You're nudging 0 to 1, in a context where expenditure is presumably 
zero or positive. And presumably 1 is (substantially?) less than 
the smallest positive number observed. 

The nudge is still a fudge. What you choose could vary drastically 
on a log scale, which is crucial here. In other contexts, some people 
use (half smallest non-zero number observed). In yet other contexts, 
people loop over a range of fudges and see what difference
it makes. 


> -----Original Message-----
> From:
> []On Behalf Of fatma bircan
> Sent: 21 April 2004 13:41
> To:
> Subject: Re: st: RE: ln1=0 for missing values
> For example in a Tobit model if we make a log transformation of the
> expenditures (dep. var.) some values of the dep. var. will have
> missing values since they were originally equal to zero. But assuming
> that the zero exp. =1 and then taling the log of expenditures, we can
> estimate the tobit model. Is this OK for having extra grouns? 
> -------------------
> >Yes, there are. Unless you have extra grounds
> >for thinking that missing really means 1, 
> >this practice surely cannot be recommended 
> >in general. 
> >
> >Nick 
> > 
> >
> >fatma bircan
> > 
> >> Is there any problems with assuming that the dependent variable
> takes
> >> the value of 1 when it is missing to make the ln(dep. var.) equal
> to
> >> zero.
> >

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