Link to home
Start Free TrialLog in
Avatar of userTester
userTesterFlag for United States of America

asked on

Model towards Normal

With Simple Linear Regression, is the goal to transform towards a near normal bell-shaped model?

In other words, if I find some skewness, residual autocorrelation, outliers, and heteroskedasticity in residuals, should I apply techniques to transform the data towards the ideal?

  1. Should the transformation be applied to the independent (X) variable only or both X and Y?
  2. when should this be applied to residuals only?
  3. should these techniques be applied early on to X and Y?

I applied the following:
  1. log(10) to X and the histogram looks more normal than before.
  2. "residual shift" technique which improved the autocorrelation substantially (autocorrelation now -0.045, Durbin-Watson now 2.09)
  3. excluded data outside the "InterQuartile Range (IQR)" - not sure if this did much

Hope you can help!
Thank you!
ASKER CERTIFIED SOLUTION
Avatar of d-glitch
d-glitch
Flag of United States of America image

Link to home
membership
This solution is only available to members.
To access this solution, you must be a member of Experts Exchange.
Start Free Trial
Avatar of userTester

ASKER

d-glitch

So, if I find that residual autocorrelation is at 0.55, I should find out why the residuals are so correlated? How do I do that?

Isn't transformation for the purpose of finding the best fit?
Thanks, so much!
Thanks, so much!