I am anaylsing a data set, which displays a heavy-tailed distribution when examined on a Quantile-Quantile plot. What is (or are) the best transformation(s) to use to correct a dataset with a heavy-tailed distribution?
You could transform the series with the natural logarithm. Alternatively, some of the literature looking at the determinants of net worth have used the inverse hyperbolic sine transformation. (See Pence 2006) It has the advantage of accommodating zero and negative values.
protected by kjetil b halvorsen Oct 18 '17 at 6:31
Thank you for your interest in this question.
Because it has attracted low-quality or spam answers that had to be removed, posting an answer now requires 10 reputation on this site (the association bonus does not count).
Would you like to answer one of these unanswered questions instead?