Question

When creating linear regression models, can we go ahead and create the model without any tansformation if our variable Y is constrained to the interval [0,1]?

Answer 1

Answer : If the value of Y is constrained to the interval [0,1], then the regression line that you would get is somewhat horizontal, if we view it, to get a good picture of its representation on the graph, we can scale the value on the y axis by multiplying them with a suitable constant, like y' = y*100, thus in this way the values on y axis gets streched and a good picture is obtained.

But the point to keep in mind is that the regression line would also get scaled in the similar fashion if we have used a constant 'a' for scaling than the slope would also gets scaled by 'a' and similarly the intercept. Thus if yoyu want to look at a more detailed view of values inside that interval than you can scale the values of Y.