Consider a model where:
Y (response variable): continuous and both positive and negative
X1 (explanatory variable): continuous data, but with many zero values
X2 (explanatory variable): binomially distributed data [0,100,1], but with many zero values
In planning a good approach I assume that:
- the many zeros for X1 (the continuous variable) will not be a problem as long as the residuals of my model are roughly normally distributed.
However, I have no idea how to handle X2. I cannot use binomial regression because my Y is both negative and positive. Could somebody point me in the right direction on how to handle this variable?