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
Moderators: EViews Gareth, EViews Moderator

 Nonnormality and collinearity are NOT problems!
 Posts: 3418
 Joined: Wed Sep 17, 2008 2:25 pm
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!
Return to “Econometric Discussions”
Who is online
Users browsing this forum: No registered users and 5 guests