A new approach to the Box-Cox transformation
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Date
2015
Authors
Velez, J.I.
Correa, J.C.
Marmolejo Ramos, F.
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Frontiers in Applied Mathematics and Statistics, 2015; 1(article no. 12 1):1-10
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Abstract
We propose a new methodology to estimate λ, the parameter of the Box-Cox transformation, as well as an alternative method to determine plausible values for it. The former is accomplished by defining a grid of values for λ and further perform a normality test on the λ-transformed data. The optimum value of λ, say λ*, is such that the p-value from the normality test is the highest. The set of plausible values is determined using the inverse probability method after plotting the p-values against the values of λ on the grid. Our methodology is illustrated with two real-world data sets. Furthermore, a simulation study suggests that our method improves the symmetry, kurtosis and, hence, the normality of data, making it a feasible alternative to the traditional Box-Cox transformation.
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Copyright 2015 The Authors. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). (https://creativecommons.org/licenses/by/4.0/)