Units of Measurement and the Inverse Hyperbolic Sine Transformation
Research output: Working paper › Research
Standard
Units of Measurement and the Inverse Hyperbolic Sine Transformation. / Aïhounton, Ghislain B. D.; Henningsen, Arne.
Department of Food and Resource Economics, University of Copenhagen, 2019.Research output: Working paper › Research
Harvard
APA
Vancouver
Author
Bibtex
}
RIS
TY - UNPB
T1 - Units of Measurement and the Inverse Hyperbolic Sine Transformation
AU - Aïhounton, Ghislain B. D.
AU - Henningsen, Arne
PY - 2019
Y1 - 2019
N2 - The inverse hyperbolic sine (IHS) transformation is frequently applied in econometric studies to transform right-skewed variables that include zero or negative values. We confirm a previous study that shows that regression results can largely depend on the units of measurement of IHS-transformed variables. Hence, arbitrary choices regarding the units of measurement for these variables can have a considerable effect on recommendations for policies or business decisions. In order to address this problem, we suggest a procedure for choosing units of measurement for IHS-transformed variables. A Monte Carlo simulation assesses this procedure under various scenarios and a replication of the study by Bellemare and Wichman (2019) illustrates the relevance and applicability of our suggested procedure.
AB - The inverse hyperbolic sine (IHS) transformation is frequently applied in econometric studies to transform right-skewed variables that include zero or negative values. We confirm a previous study that shows that regression results can largely depend on the units of measurement of IHS-transformed variables. Hence, arbitrary choices regarding the units of measurement for these variables can have a considerable effect on recommendations for policies or business decisions. In order to address this problem, we suggest a procedure for choosing units of measurement for IHS-transformed variables. A Monte Carlo simulation assesses this procedure under various scenarios and a replication of the study by Bellemare and Wichman (2019) illustrates the relevance and applicability of our suggested procedure.
M3 - Working paper
T3 - IFRO Working Paper
BT - Units of Measurement and the Inverse Hyperbolic Sine Transformation
PB - Department of Food and Resource Economics, University of Copenhagen
ER -
ID: 232298838