Log

#1
Dear all,

Im am doing an OLS regression. My dependent variable has large negative values, many zeros and large positive values. How can I transform my data in such a way that I can take the log of this data?
 
#3
Log cannot be applied to negative values and zeros.

To solve for zeros, I can add a constant (1) to each variable. But this does solve for the negative values.

So my question is, how do I have to transform my data, so that I can take the log of the whole data set, including negative, positive and zero values.

I hope I formulated my question more clear.
 

maartenbuis

TS Contributor
#5
If the negative values are real, i.e. not the result of some error, then taking logs makes no sense. One option is the cube root is a transformation; it is somewhat similar to a log but can handle negative values.