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The Most Commonly Used Method to Remedy Non-Normality or Heteroscedasticity y′=log⁡y( provided y≥0)y ^ { \prime } = \log y ( \text { provided } y \geq 0 )

Question 33

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The most commonly used method to remedy non-normality or heteroscedasticity in regression analysis is to transform the dependent variable. The most commonly used transformations are y′=log⁡y( provided y≥0)y ^ { \prime } = \log y ( \text { provided } y \geq 0 ) , y′=y2y ^ { \prime } = y ^ { 2 } , y′=y( provided y≥0)y ^ { \prime } = \sqrt { y } ( \text { provided } y \geq 0 ) , and y′=1/yy ^ { \prime } = 1 / y .

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