Logs with Zeros? Some Problems and Solutions

Logs with Zeros? Some Problems and Solutions Abstract When studying an outcome Y that is weakly positive but can equal zero (e.g., earnings), researchers frequently estimate an average treatment effect (ATE) for a “log-like” transformation that behaves like log (Y) for large Y but is defined at zero (e.g., log (1 + Y), $\operatorname{arcsinh}(Y)$). We argue that ATEs for log-like transformations should not be interpreted as approximating percentage effects, since unlike a percentage, they depen...