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Elasticities and the Inverse Hyperbolic Sine Transformation

Bellemare, Marc F. ; Wichman, Casey J.

Oxford bulletin of economics and statistics, 2020-02, Vol.82 (1), p.50-61 [Periódico revisado por pares]

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Título:
Elasticities and the Inverse Hyperbolic Sine Transformation
Autor: Bellemare, Marc F. ; Wichman, Casey J.
Assuntos: Elasticity ; Transformation
É parte de: Oxford bulletin of economics and statistics, 2020-02, Vol.82 (1), p.50-61
Notas: We are grateful to James Fenske and three anonymous reviewers for their comments and suggestions. We also thank Jeff Bloem, Dave Giles, Seema Jayachandran, Jason Kerwin, David McKenzie, Steve Miller and Joe Ritter for comments on an earlier version of this paper. All remaining errors are ours.
Descrição: Applied econometricians frequently apply the inverse hyperbolic sine (or arcsinh) transformation to a variable because it approximates the natural logarithm of that variable and allows retaining zero‐valued observations. We provide derivations of elasticities in common applications of the inverse hyperbolic sine transformation and show empirically that the difference in elasticities driven by ad hoc transformations can be substantial. We conclude by offering practical guidance for applied researchers.
Editor: Oxford: Blackwell Publishing Ltd
Idioma: Inglês

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