I intend to conduct a multiple linear regression using large US Health Survey data. However, having looked at one of the variables relating to income, it seems that it has been top-coded at the 95th percentile.
As such I was wondering what the impact on the regression would be if I was to delete those observations which have been topcoded, and indeed whether this would be the best thing to do?
My understanding is that the top-coded data (which comprises 1.3% of the total data) would produce a bias in the data and therefore in the regression model. Therefore, as I mentioned, it should be removed?
Your help is much appreciated!