*****the thread should be: change sign observations variablebecause of underlying theory******

(sorry for the mistakes in the previous version of this post)

Dear forum readers,

Is someone allowed to put a minus in front of a variable observation, to obtain its contrary, if this is supported by an underlying theory?

My first idea was that this is basically a manipulation, which forces the estimates to go in the direction we want to.

My case is the following. We have experimental data, and we use proxies for competition on the demand side of the labour market (our variable of interest); we know from the previous literature that the competition has a negative effect on the dependent variable. 2 proxies we used are negatively related to Y (so, in that they are good proxies), and thus also on competition (the proxy decreases in value, the competition increases, Y decreases). The third proxie we use is a rate and moves instead on the same direction of competition (increase in the rate, increase in the competition), therefore it has a positive effect on Y, which makes it a bad proxy. So, I thought we might use the opposite of this variable to be a proxy for competition, so that we keep the negative relationship between the proxy and the dependent variable. The opposite of this rate (by that I mean: 1-rate) is a measure that actually makes sense.

(sorry for the mistakes in the previous version of this post)

Dear forum readers,

Is someone allowed to put a minus in front of a variable observation, to obtain its contrary, if this is supported by an underlying theory?

My first idea was that this is basically a manipulation, which forces the estimates to go in the direction we want to.

My case is the following. We have experimental data, and we use proxies for competition on the demand side of the labour market (our variable of interest); we know from the previous literature that the competition has a negative effect on the dependent variable. 2 proxies we used are negatively related to Y (so, in that they are good proxies), and thus also on competition (the proxy decreases in value, the competition increases, Y decreases). The third proxie we use is a rate and moves instead on the same direction of competition (increase in the rate, increase in the competition), therefore it has a positive effect on Y, which makes it a bad proxy. So, I thought we might use the opposite of this variable to be a proxy for competition, so that we keep the negative relationship between the proxy and the dependent variable. The opposite of this rate (by that I mean: 1-rate) is a measure that actually makes sense.

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