Consider the following to answer the question(s) below:
A regression model was developed relating average annual pay to the percentage of women employed for a sample of companies. Below is the plot of residuals versus predicted values.
-Which of the following re-expressions of the data would be appropriate?
A) Square the data values.
B) Cube the data values.
C) Use a logarithmic transformation.
D) Use a geometric transformation.
E) Only extrapolation would help.

Question

Consider the following to answer the question(s) below:
A regression model was developed relating average annual pay to the percentage of women employed for a sample of companies. Below is the plot of residuals versus predicted values. 
-Which of the following re-expressions of the data would be appropriate?
A) Square the data values. 
B) Cube the data values. 
C) Use a logarithmic transformation. 
D) Use a geometric transformation. 
E) Only extrapolation would help.

Quizplus · Accepted Answer

The plot shows non-linear pattern and heteroscedastic errors, indicating the need for a transformation to linearize the relationship and equalize variances. A logarithmic transformation can be appropriate when a relationship follows a curvilinear pattern. Squaring or cubing the data values would make the curve even more pronounced, while a geometric transformation is not a well-defined transformation. Extrapolation is not relevant to the question of transforming the data.

Consider the Following to Answer the Question(s) Below