Units of Measurement and the Inverse Hyperbolic Sine Transformation
Research output: Working paper › Research
Documents
- Units of Measurement and the Inverse Hyperbolic Sine Transformation
Final published version, 1.08 MB, PDF document
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.
Original language | English |
---|---|
Publisher | Department of Food and Resource Economics, University of Copenhagen |
Number of pages | 20 |
Publication status | Published - 2019 |
Series | IFRO Working Paper |
---|---|
Number | 2019/10 |
Links
- https://econpapers.repec.org/paper/foiwpaper/2019_5f10.htm
Final published version
Number of downloads are based on statistics from Google Scholar and www.ku.dk
No data available
ID: 232298838