Linear Regression: Log Transformation of Features

In linear regression, you fit the model

(1)   \begin{align*}y=X\beta+\epsilon\end{align*}

However, often the relationship between your x and y variables is not linear, and transformations are required. Let’s look at some cases where log transformations of features are appropriate. One primarily transforms features to achieve linearity.

Untransformed and Log Terms

Consider the model

(2)   \begin{align*}y=\alpha+\beta_1 \log x_1+\beta_2 x_2+\epsilon\end{align*}

This implies that a unit change in \log x_1 leads to an expected change in y of \beta_1, holding x_2 fixed. That is, y changes slowly as a function of \beta_1. Let’s generate synthetic data from a model like this. We’ll generate data, fit the wrong model, and look at the fitted vs residuals plot.


It looks pretty linear, despite fitting a linear model to a non-linear relationship. This is because \log grows sub-linearly and , so the linear part 2 x_2 dominates.

Log Only

However, if we remove the dominating term, we see


this is clearly non-linear, and looks similar in shape to the graph of plotting y=log(x) in Google, although the latter is strictly increasing

In conclusion, having an un-transformed covariate where the true relationship involves the log of the covariate is generally difficult to detect from the fitted vs residual plot when some other term dominates: however, for hypothesis tests and inferences to be correct, this needs to be handled. In some cases given that it can be difficult to detect empirically, one may want to think about theoretical relationships between features/covariates and responses.

As a further comment, you may note that the true log plot looks like it could be approximated pretty well via a two or three piece piecewise linear function. Over some ranges of the untransformed covariate, fitting a linear model is not bad, as long as you don’t expect the fit to extrapolate well.

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