1
$\begingroup$

My histogram of expected income is as below.

As you can see, income is highly right skewed. I want to divide individuals with regard to income - for example into Low, Middle, and High, and then I want to compare the other properties of individuals in each of the three groups.

Any idea about dividing into groups with highly right skewed data?

enter image description here

$\endgroup$
  • 2
    $\begingroup$ Take the logarithm of x and then plot that. $\endgroup$ – Steve S Jul 30 '14 at 5:56
1
$\begingroup$

Use a non-linear function. Functions such as $\log x$, $e^x$ and $\sqrt{x}$ change skewedness of your data.

The exact "correct" scaling depends on your data, and can often only be guessed.

For income data, $\log(x)$ or $\log(x+1)$ might work.

$\endgroup$

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.