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RE: st: RE: model for fractional data with panel data

From   "Nick Cox" <>
To   <>
Subject   RE: st: RE: model for fractional data with panel data
Date   Tue, 6 Nov 2007 19:07:01 -0000

There are at least two issues here. 

1. Whether your data need a non-identity transformation or link 
function and which would be good, or best. 

I can't say. But alternatives include logit and cloglog. 

2. Whether logs are _inherently_ problematic for arguments in (0,1). 

My answer is No. But for your data, plot log(p) against p and 
see if outliers pop out. Look at the distribution of p and log(p), 
etc. Consult theory, and use subject-matter knowledge. 

Alessia Matano, or Ilaria Tucci, or anyone else on the team there: 

zero is not present in my estimation. My variable varies between 0 and
1 with extremes excluded, since my share is the relative employment of
white collar workers in any firm and
there are no firms with only non white collar workers. However the
fact that the logarithmic variable is bounded at 0 worries me. It's
like I am estimating an impact on a variable which is "truncated", but
not in a classical way. It is in this respect that I would like to get

2007/11/6, Nick Cox <>:
> The fact that a logarithm may be negative should not worry you one
> The fact that log 0 is indeterminate should worry you a lot if you
> exact zeros in your data. What to do when you have 0 and wish to take
> logarithms is one of the most frequently discussed problems on this
> list.
> Nick
> Ilaria Tucci
> Another question: Is that right that is not possible to transform the
> dependent variable in logarithmic form and then apply the related
> data models, since the logarithm of a variable between 0 and 1, varies
> between -infinite and 0, and thus it does no make sense to perform
> analysis on such a variable?

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