MTH-416, REGRESSION ANALYSIS Lecture 5: Chapter5-Regression-TransformationAndWeightingToCorrectModelInadequacies
21 Jul 2021
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Document Summary
The graphical methods help in detecting the violation of basic assumptions in regression analysis. Now we consider the methods and procedures for building the models through data transformation when some of the assumptions are violated. A common reason for such isolation is that regression analysis, 2 n the variance of disturbances is constant, Var it i i the study variable follows a probability distribution in which the variance is functionally related to mean. For example, if the study variable ( )y in the model is poisson random variable in a simple linear regression model, then its variance is the same as the mean. Since mean of y is related to the explanatory variable x , so the variance of y will be proportional to x . In such cases, variance stabilizing transformations are useful. In another example, if y is proportion, i. e. , 0 to. Some commonly used variance-stabilizing transformations in the order of their strength are as follows:
