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Re: st: Sample selection?

From   Maarten buis <[email protected]>
To   [email protected]
Subject   Re: st: Sample selection?
Date   Sat, 12 Jan 2008 19:47:50 +0000 (GMT)

--- Suryadipta Roy <[email protected]> wrote:
> My dependent variable is continuous taking negatitve to positive
> values. In order to convert it into logarithms, I used a positive
> transformation and then ran the regression with the logarithm value
> as the dependent varible. I am finding that the values of the
> coefficients of my explanatory variables are different from the one
> when the original value was used as the dependent variable. I was
> wondering if I need to address sample selection issues when I am
> using the logarithm and thereby constraining the variable to be
> positive only, and why the values of the coefficients differ in the
> two cases.

No, say your original depedent variable is in euros, than your
coefficient tells you the expected increase or decrease in euros for a
unit increase in your dependent variable. In your log transformed model
you get the expected increase or decrease in log(euros) for a unit
increase in your depedent variable. So the coefficients are different
because they mean something different.
> Also, my main explanatory variable is categorical in nature ( 0 -
> 10). Is it alright to treat this as a continuous variable in the
> regression? 

Depends, if it is truely categorical (e.g christian, muslim, hindu,
etc.) than you can add it as a continuous variable (in the sense that
Stata won't complain) but the outcome is complete rubbish. If it is
oridinal than you are assuming that the distance between the categories
are the same. I you think (and can convince others) that that is ok,
than you can do it.

Hope this helps,

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

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