Hi Yes my other variables are Size (log of sales) Leverage (Total Liabilities/Total Equity) Investment and Intangible Assets.
I presume I would normalise Investment and Intangible Assets against Total Assets (given that Tobin's Q is over Total Assets). Regards Mark "Warren Sarle" <[EMAIL PROTECTED]> wrote in message anfpba$9b2$[EMAIL PROTECTED]">news:anfpba$9b2$[EMAIL PROTECTED]... > > In article <anetqm$[EMAIL PROTECTED]>, > [EMAIL PROTECTED] (Herman Rubin) writes: > > In article <anb426$9r9$[EMAIL PROTECTED]>, > > Mark <[EMAIL PROTECTED]> wrote: > > > I'm been told that I should normalise all my variables. > > > I'm using Tobin's Q as my dependent variable which simplified is the market > > > value over the total assets. > > > It has been suggested that therefore all my independent variables should be > > > normalised by being over assets. > > > > > Is this correct? > > > > I would state otherwise; NEVER do any processing to your > > data not determined by the problem. Never normalize; > > never let the computer do your thinking for you. > > Herman, read the question again. Mark is not asking about > transforming variables to have normal distributions. He's > asking about financial entities that vary in size (total > assets), and whether the problem requires that the variables > be expressed as relative to total assets. That's a perfectly > reasonable question indicating that he's doing some thinking. > > It would help if Mark told us what the other variables _are_, > but it is quite plausible that variables that would be > expected to scale with total assets should in fact be > normalised by total assets. > > -- > > Warren S. Sarle SAS Institute Inc. The opinions expressed here > [EMAIL PROTECTED] SAS Campus Drive are mine and not necessarily > (919) 677-8000 Cary, NC 27513, USA those of SAS Institute. . . ================================================================= Instructions for joining and leaving this list, remarks about the problem of INAPPROPRIATE MESSAGES, and archives are available at: . http://jse.stat.ncsu.edu/ . =================================================================
