Could you please answer how should we approach this situation in linear regression problem: The target variable is distributed in a skewed fashion(50% of the values lie in the range 0-300 and 40% in 300-500 and 10% in remaining 500-1000. Will this cause a problem to my regression model and how will you approach to tackle with such problem?
As far as I know, you should look at whether or not your residuals are normal or not. If they are not normal, then you many consider transformation. For this, I would say you need to apply a log transformation, given it is fairly right skewed data. Applying a log transformation would help center the data into a more Gaussian distribution, where the data is more centrally located.