The Use of the Box-Cox Transformation in Limited Dependent Variable Models
- 1 June 1978
- journal article
- research article
- Published by JSTOR in Journal of the American Statistical Association
- Vol. 73 (362) , 284
- https://doi.org/10.2307/2286653
Abstract
The general limited dependent variable model discussed in this article permits skewness in a pretruncated variable by transforming it within the class of Box-Cox transformations. As a by-product this general model also provides a convenient nesting framework for statistically distinguishing between numerous limited dependent variable models. An application to a model of the supply of bilateral foreign aid illustrates the ability of the general model to empirically distinguish between competing specifications.Keywords
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