The Box-Cox Transformation: Power Invariance and a New Interpretation

M. Gaudry and R. Laferriere

Cahiers de recherche from Universite de Montreal, Departement de sciences economiques

Abstract: We Show That a Box-Cox Transformation on the Dependent Variable of Linear Regression Models Is Invariant to Power Transformations of That Variable Even Without the Presence of a Regression Constant And, Consequently, Can Sometimes Be Interpreted As a Simple Power Transformation the Estimation of Which Will Then Admit of a Non-Degenerate Solution.

Keywords: Statistics; Uncertainty (search for similar items in EconPapers)
Date: Written 1988

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Persistent link: http://EconPapers.repec.org/RePEc:mtl:montde:8818

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