# What statistical test should I use and for what reason?

My dependent variable is an index from annual reports of companies (ranging from 0 to 1). The independent variables will be measured with Likert scales (individuals in each company will respond to the questions – a group of items rated with a Likert scale). What is the most appropriate statistic to use in this scenario? I need help please.

Dependent variable (index from one company) $=f$(Three separate Likert Scales measuring three different issues)

• Why is the index bounded between 0 and 1, in terms of the data-generating process? – abaumann Feb 27 '14 at 20:11
• Yes, how do you get numbers between 0 and 1 from a Likert which is most often 5 points? – Doctorambient Feb 27 '14 at 20:18
• @DoctorAmbient The (0,1) variable is the DV (the $y$), while the Likert scales are the IVs (the $x$'s). – Glen_b -Reinstate Monica Feb 27 '14 at 20:24
• @Glen_b Sorry! Totally misread that! Does the index have an interpretation as a probability or as something else? The suggestions below deal with the transformation of $y$, but should the $x$'s be transformed, too? Are they all the same Likert scale, or do the scales vary? (I've seen that happen more than you think!) – Doctorambient Feb 27 '14 at 20:30