March 2019
Beginner to intermediate
448 pages
13h 14m
English
We should probably plot the untransformed y on the left Y axis. The ace algorithm will iterate by applying appropriate transformations to both y and x, in order to maximize the R2. It is known as the alternating conditional expectations algorithm.
The algorithm works with this model and finds the appropriate Φ and
functions that minimize the difference between the predictions and the observed values:

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