Optimal power transformation via inverse response plots

We present a new Stata command, irp, that generates the inverse response plot (Cook and Weisberg, 1994, Biometrika 81: 731–737) of a response on its predictors. Using the inverse response plot, an appropriate scaled power transformation for the positive response variable can be found so that the trans- formed response mean is linear in the predictors. The optimal transformation is displayed in the plot, as are user-specified guesses. By using the graphical display, the user may determine whether an appropriate transformation exists as well as determine its value. We demonstrate the irp command using both a generated and a real example. Copyright 2010 by StataCorp LP.