Dear Eviews users,
Im having a trouble to understand how to transform my data, I hope some one can help me here.
I am going to estimate a lCobbDouglas production function, however my variables dont have the same unit of measurements, reason why I need to standardize my data. The issue is that for estimating a CobbDouglas function we need to take the logarithm form of the data, now I am not sure if it is correct to standardize the log of the variables?
Thank you in advance
Data transformation
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Re: Data transformation
There is no need to standardize the data. Just take logs. Any difference in units of measurement will be reflected in the constant term.

 Posts: 1
 Joined: Tue Nov 28, 2017 10:55 am
Re: Data transformation
I am quite a novice in panel data regression.
I have a question with my data, any help would be much appreciated.
I have the dependent variable is Profitability denoted by Profit after tax (P) in CHF Millions
Independent Variables are the below:
Net Interest Margin as a ratio in % (NIM)
Total Assets of the Banks in CHF Millions (TA)
Loan Loss Provisions as a ratio in % (LLP)
Cost to Income Ratio as a ratio in % (CTI)
Interest Income Share as a ratio in % (IIS)
NonInterest Income in CHF Millions (NII)
Real GDP Growth Rate in % (GDP)
Inflation in % (Inf)
3M Libor Interest Rates in % (IR)
And below is the equation of my model:
P=c+β_1*NIM+β_2*TA+β_3*LLP+β_4*CTI+β_5*IIS+β_6*NII+β_7*GDP+β_8*Inf+β_9*IR+ε
Which variables should I apply natural log to before starting the regression? Is it really a requirement to apply a log? I am quite lost with this now and would really be helpful if someone could advise on my query regarding the transformation.
Many thanks!
I have a question with my data, any help would be much appreciated.
I have the dependent variable is Profitability denoted by Profit after tax (P) in CHF Millions
Independent Variables are the below:
Net Interest Margin as a ratio in % (NIM)
Total Assets of the Banks in CHF Millions (TA)
Loan Loss Provisions as a ratio in % (LLP)
Cost to Income Ratio as a ratio in % (CTI)
Interest Income Share as a ratio in % (IIS)
NonInterest Income in CHF Millions (NII)
Real GDP Growth Rate in % (GDP)
Inflation in % (Inf)
3M Libor Interest Rates in % (IR)
And below is the equation of my model:
P=c+β_1*NIM+β_2*TA+β_3*LLP+β_4*CTI+β_5*IIS+β_6*NII+β_7*GDP+β_8*Inf+β_9*IR+ε
Which variables should I apply natural log to before starting the regression? Is it really a requirement to apply a log? I am quite lost with this now and would really be helpful if someone could advise on my query regarding the transformation.
Many thanks!
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