Thus taking the log means that high values will be

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Unformatted text preview: 2200354 .0201541 -10.92 0.000 -.2595428 -.180528! hisp | -.06267 .0342564 -1.83 0.067 -.1298217 .0044816! femalehd | -.2448488 .0245195 -9.99 0.000 -.2929136 -.196784! marriedhd | .6268674 .0234924 26.68 0.000 .5808161 .6729188! hsdropout | -.3733824 .0257042 -14.53 0.000 -.4237695 -.3229954! somecoll | .2201835 .0232687 9.46 0.000 .1745706 .2657964! collgrad | .4488191 .0249016 18.02 0.000 .4000055 .4976328! _cons | 9.943852 .0925671 107.42 0.000 9.762396 10.12531! ------------------------------------------------------------------------------! 7 2/17/12 More about logs •  How the log transforma:on works: –  On a log- scale, the distance between 1 and 2 is the same as the distance between 2 and 4, and the distance between 4 and 8, etc. –  Thus, taking the log means that high values will be more bunched together and low values will be more spread apart. –  This means that in some cases, if the rela:onship between X and Y is curved, then the rela:onship between log(X) and Y will be close to linear. •  Note that log(0)=- ∞, and log(1)=0. So all values (from the original variable) below 1 should be converted to 0 aeer the log transforma:on. Inverse transforma:ons 1 yi = β 0 + β1 + ε i •  Func:onal Form: x •  This is useful when we think that the i rela:onship looks like: Y Y X X 8 2/17/12 Using categorical independent variables •  The independent variables we’ve been using are all interval level (age, number of :mes aZended church, etc.) •  A lot of social science variables are categorical (gender, race, region, etc.) •  To include these, we create “dummy” variables (0/1 variables). One category must be omiZed to serve...
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This note was uploaded on 03/28/2012 for the course PADP 8130 taught by Professor Fertig during the Spring '12 term at LSU.

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