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  • Box Cox Transformation

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    HJ Consultants
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    The document discusses the Box-Cox transformation, which transforms non-normal dependent variables into a normal shape. The Box-Cox transformation formula is given as y(λ) = (yλ - 1)/λ if λ ≠ 0 and log(y) if λ = 0, where λ is the transformation parameter that ranges from -5 to +5. Examples of applying the transformation to different λ values are provided.

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    The document discusses the Box-Cox transformation, which transforms non-normal dependent variables into a normal shape. The Box-Cox transformation formula is given as y(λ) = (yλ - 1)/λ if λ ≠ 0 and log(y) if λ = 0, where λ is the transformation parameter that ranges from -5 to +5. Examples of applying the transformation to different λ values are provided.

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    12 views1 page

    Box Cox Transformation

    Uploaded by

    HJ Consultants
    The document discusses the Box-Cox transformation, which transforms non-normal dependent variables into a normal shape. The Box-Cox transformation formula is given as y(λ) = (yλ - 1)/λ if λ ≠ 0 and log(y) if λ = 0, where λ is the transformation parameter that ranges from -5 to +5. Examples of applying the transformation to different λ values are provided.

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    © All Rights Reserved
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    Box Cox Transformation

    Contributed By: Ajay Athitya R

    1. What is a Box-Cox transformation?


    Ans: A Box-Cox transformation is a way to transform non-normal dependent variable into a
    normal shape

    2. Mention the formula used for Box-Cox Transformation?


    𝑦 −1
    𝑦(λ) = , 𝑖𝑓 λ ≠ 0
    λ
    log 𝑦, 𝑖𝑓 λ = 0
    3. What is the value of y (-5)?

    Ans: y-5 = 1/y5

    4. What is the value of y (0.5)?

    Ans: y0.5

    5. The Phenomenon of non-constant variance is called as ________.

    Ans: Heteroscedasticity.

    6. What is the range of lambda?

    Ans: -5 to +5

    7. What is the value of y(0)?

    Ans: log(y)

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