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3 years ago

13

You find your dependent variable has a high degree of kurtosis. What is the first way to try to fix it?

1 answer:

Morgarella [4.7K]3 years ago

7 0

The first way to try to fix this is to apply logarithm to the observations on the dependent variable. This is going to make the dependent variable with high degree of kurtosis normal.

Note that sometimes, the resulting values of the variable will be negative. Do not worry about this, as it is not a problem. It does not affect the regression coefficients, it only affects the regression intercept, which after transformation, will be of no interest.

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<em>Correct option B.</em>

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