Chapter5TransformationsandWeightingtoCorrectModel.ppt

Chapter 5 Transformations and Weighting to Correct Model Inadequacies Ray-Bing Chen Institute of Statistics National University of Kaohsiung 5.1 Introduction Recall several implicit assumptions: The model errors have mean zero and constant variance and are uncorrelated. The model errors have a normal distribution The form of the model, including the specification of the regressors, is correct. Plots of residuals are very powerful methods for detecting violations of these basic regression assumptions. In this chapter, we focus on methods and procedures for building regression models when some o