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Re: st: When to use Log (1+x) Transformation?


From   Maarten buis <maartenbuis@yahoo.co.uk>
To   statalist@hsphsun2.harvard.edu
Subject   Re: st: When to use Log (1+x) Transformation?
Date   Sun, 6 Apr 2008 17:08:04 +0000 (GMT)

Is this particular variable an endogenous variable?


-- Maarten
-----------------------------------------
Maarten L. Buis
Department of Social Research Methodology
Vrije Universiteit Amsterdam
Boelelaan 1081
1081 HV Amsterdam
The Netherlands


visiting address:
Buitenveldertselaan 3 (Metropolitan), room Z434


+31 20 5986715


http://home.fsw.vu.nl/m.buis/
-----------------------------------------


----- Original Message ----
From: Song <raravise@gmail.com>
To: statalist@hsphsun2.harvard.edu
Sent: Sunday, 6 April, 2008 6:53:26 PM
Subject: Re: st: When to use Log (1+x) Transformation?

Dear Marteen,

Thank you for the informaiton. I need to use log transfomation for both my 
dependent variable and independent variables. I cannot us glm, because I am 
estimating a simultaneous equation model by 3SLS (reg3). I know it is not 
recommended to use log(1+y) for a dependent variable because it is not clear 
how to recover the conditional expectatino E(Y/X) from E[(1+Y)/X]. However, 
I am not sure what is wrong with log(1+x) for an independent varible. Can 
you provide a little more details?

Thank you very much,
Reo.

----- Original Message ----- 
From: "Maarten buis" <maartenbuis@yahoo.co.uk>
To: <statalist@hsphsun2.harvard.edu>
Sent: Saturday, April 05, 2008 1:26 PM
Subject: Re: st: When to use Log (1+x) Transformation?


> --- Song <raravise@gmail.com> wrote:
>> I need to use log transformation before regression analysis. Because
>> some of my variables contain 0, I need to use log (1+x) instead of
>> log (x), where x contains only positive values. My question is... Do
>> I need to use log (1+x) if x does not contain 0, but contains values
>> less than one? I think I can  use log (x) in this case.
>
> This question comes up so every once in a while, and the answer is
> always that you should not do the log(1+x) transformation at all. If
> the variable is your dependent variable you can avoid doing that by
> using -glm- with the -link(log)- option. If your variable is an
> independent variable, the concern is linearity of the effect of that
> variable, so you can work around that by entering it as a spline. See:
> -help glm- and -help mkspline-.
>
> Hope this helps,
> Maarten
>
> -----------------------------------------
> Maarten L. Buis
> Department of Social Research Methodology
> Vrije Universiteit Amsterdam
> Boelelaan 1081
> 1081 HV Amsterdam
> The Netherlands
>
> visiting address:
> Buitenveldertselaan 3 (Metropolitan), room Z434
>
> +31 20 5986715
>
> http://home.fsw.vu.nl/m.buis/
> -----------------------------------------
>
>
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