If we're using income as an independent variable, but our dataset for some reason has people with incomes ranging from $3,000 to $30,000,000. What might we want to do?
A) use a squared version of the income variable in addition to the regular version
B) divide each person's income by 1000
C) use the log of the income variable
D) find another dataset

Question

Quizplus · Accepted Answer

When dealing with a wide range of incomes, it is often helpful to use the log of the income variable in order to normalize the distribution and avoid skewness. Therefore, using the log of the income variable would be the best choice.

If We're Using Income as an Independent Variable, but Our