Hi all,
I'm looking at some log real income and log real wage data as outcome variables in a difference-in-differences specification. I'm trying to figure out the best way to deal with zero income/wage values. What I have currently done is to convert them to 1 when I do the log transformation. Is this the best approach, or should I consider an alternative like a Poisson model (which would enable me to retain the zeros as zeros) or any other model?
Many thanks,
Ashani
I'm looking at some log real income and log real wage data as outcome variables in a difference-in-differences specification. I'm trying to figure out the best way to deal with zero income/wage values. What I have currently done is to convert them to 1 when I do the log transformation. Is this the best approach, or should I consider an alternative like a Poisson model (which would enable me to retain the zeros as zeros) or any other model?
Many thanks,
Ashani
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