The handling of continuous tariff variables: tips and experiences

Document description

Using continuous variables to describe some data we often Incur in some plausibility problems for extreme low and high values. Assuming that the continuous function which describes the relationship between some explanatory variables (covariates) and a response variable lies in a affine linear space (as in the case of the generalised linear models) we can solve these problems with an appropriate choice of the affine linear space.