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  • Dealing with 0 percent in independent variable

    Hello,
    I am new to Statalist. I want to run a regression containing panel data from multiple countries. One of the independent variable is reserve percentage, which for some countries is Zero (0) percent. So approximately 20%-30% data may have 0 percentage. I want to see its relationship with bank performance. Can anyone suggest suitable ways to deal with the 0 values? Is it a good idea to convert the percentage variable by adding 100 to all values to avoid 0's?
    I initially planned to run panel regression, but is open to suggestions in this regard as well.
    Thank you.

  • #2
    You don’t need to do anything unless you think there’s a discontinuous effect in going from zero to a small positive number. I’m not sure why there would be.

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