Non-Robustness in Log-Like Specifications

Jack Fitzgerald, Joop Adema, Lenka Fiala, Essi Kujansuu and David Valenta
Additional contact information
Jack Fitzgerald: Vrije Universiteit Amsterdam
David Valenta: University of Ottawa

No juda7_v1, MetaArXiv from Center for Open Science

Abstract: Recent literature shows that when regression models are estimated on variables transformed with 'log-like' functions such as the inverse hyperbolic sine or ln(Z + 1) transformations, one can obtain (semi-)elasticity estimates of any magnitude by linearly re-scaling the input variable(s) before transformation. We systematically re-analyze the replication data of 46 papers whose main conclusions are defended by log-like specifications. Our replication findings motivate new theoretical and simulation results showing that in log-like specifications, unit scale can be used to overfit data, creating an uncontrolled multiple hypothesis testing problem that frequently yields spuriously significant results. In particular, 38% of the estimates we re-analyze sit in a 'sweet spot', where both upward and downward re-scalings of variables' units before transformation shrink test statistics. Consequently, published estimates in this literature are statistically significant over 40% more frequently than in the general economics literature. We find that modest changes to model specification yield different statistical significance conclusions for 14-37% of estimates defending papers' main claims. We also show that for 99.8% of estimates, variables transformed with log-like functions do not meet data requirements for log-like specifications from a methodological recommendation cited by all papers in our replication sample. We synthesize and harmonize methodological guidelines and advocate for more robust alternative specifications, including normalized estimands, Poisson regression, and quantile regression.

Date: 2026-03-16
New Economics Papers: this item is included in nep-ecm and nep-inv
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://osf.io/download/69b48aa9023f9ad1cb4f7d70/

Related works:
Working Paper: Non-Robustness in Log-Like Specifications (2026)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:osf:metaar:juda7_v1

DOI: 10.31219/osf.io/juda7_v1

Access Statistics for this paper

More papers in MetaArXiv from Center for Open Science
Bibliographic data for series maintained by OSF ().