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Your dependent variable Y is a count, ranging from 0 to infinity. Because Y is approximately log-normally distributed, you decide to log-transform the data prior to performing a linear regression. What should you do before log-transforming Y?
Correct Answer: A
Explanation Before log-transforming Y, we should add 1 to all of the Y values. This is because log transformation is undefined for zero or negative values, and some of the Y values may be zero. Adding 1 to all of the Y values can avoid this problem and ensure that the log transformation is valid and meaningful. Adding 1 to all of the Y values is also known as a log-plus-one transformation.
