Model Options For Log-Transformed Dependent Variables

This month's Stata News (34:2) includes a quite helpful (and instructional--with examples and coding) discussion about some classic challenges that arise from a log-transformed dependent variable. First, the need to log-transform dependent variables is exceedingly common in ELS (e.g., punitive damages models). Second, when log transformations are necessary interpretation challenges arise as few among us think in terms of, e.g., "log punitive damages" or "log wages." The essay walks readers through various model options (regression and poisson) and how to exploit the margins command to assist with interpreting results even further.