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Math Help - Choosing the best dependent variable (Y)

  1. #1
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    Choosing the best dependent variable (Y)

    Hello,

    I'm working on a multiple regression model. The dependent variable (Y) is an ordered multinomial variable taking these values: A, B, C, D, E and F. The best value is A and the worst is F. In order to run a regression model, one needs to transform the letters (A, B, etc.) into figures.
    I hereby ask you: which method between the following three is the best one? Linear transformation, Logistic Transformation and Exponential Transformation (each transformation method can have a logical explanation and a theoretical background)..


    Example of figures which can be attributed to the different values of Y:
    1. linear transformation : A=6, B=5,C=4.. F=1
    2. logistic transformation: A=1, B=0,98, C=0,89, .. F=0.01
    3. exponential transformation: A=10, B=8, C=5 .. F=1

    Thanks.
    Last edited by goldenboy1; November 23rd 2012 at 07:26 AM.
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  2. #2
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    Re: Choosing the best dependent variable (Y)

    Hey goldenboy1.

    If you are doing the transformation, the best thing is to plot the data first to see if the transformation is adequate.
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  3. #3
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    Re: Choosing the best dependent variable (Y)

    Hey chiro,
    Thanks for your reply. What do you mean by plot the data?
    I have a list of companies and their rankings. How to plot a plot and how to pick the best transformation method? I have a first idea which consists on:
    1/ Make the regression using the three trans. methods
    2/ Compute the residues --> The best trans. method is the one which minimizes the residues.
    What do you think?
    Last edited by goldenboy1; November 25th 2012 at 11:53 PM.
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  4. #4
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    Re: Choosing the best dependent variable (Y)

    Any idea??
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