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Re: st: RE: question about calculating discounted sum

 From Robin Luo To statalist@hsphsun2.harvard.edu Subject Re: st: RE: question about calculating discounted sum Date Sun, 20 Feb 2005 14:43:57 -0800

```Scott,

Thank you very much for your reply. My data actually has a large time
span and normally a firm will have records for 30 or 40 years.
Therefore the direct method is virtually not practical. Thanks a lot
for pointing out the macro thing - I obviously misunderstood it.

Thanks again!

Robin

On Sun, 20 Feb 2005 16:37:04 -0600, Scott Merryman <smerryman@kc.rr.com> wrote:
> How about attacking this problem directly:
>
> bysort firm (year): gen num = _n
> gen sum = 0
> by firm: replace sum = income + income[1]/num[2] if num== 2
> by firm: replace sum = income + income[1]/num[3] + income[2]/num[2] ///
>         if num ==  3
> by firm: replace sum = income + income[1]/num[4] + income[2]/num[3] + ///
>         income[3]/num[2] if num ==  4
> by firm: replace sum = income + income[1]/num[5] + income[2]/num[4] + ///
>         income[3]/num[3] + income[4]/num[2] if num == 5
> by firm: replace sum = income + income[1]/num[6] + income[2]/num[5] + ///
> income[3]/num[4] + income[4]/num[3] + income[5]/num[2] if num == 6
>
> Hope this helps,
>
> Scott
>
> P.S.  `=seq' is the same as seq[1] or 1
>
> > -----Original Message-----
> > From: owner-statalist@hsphsun2.harvard.edu [mailto:owner-
> > statalist@hsphsun2.harvard.edu] On Behalf Of Robin Luo
> > Sent: Saturday, February 19, 2005 1:18 PM
> > To: statalist@hsphsun2.harvard.edu
> > Subject: st: question about calculating discounted sum
> >
> > I need to calculate discounted sum for a variable in a panel data. My
> > data is like:
> >
> >  FirmID      year     income
> >    100        1980     50000
> >    100        1981     51000
> >    100        1982     54000
> >    100        1983     60000
> >    100        1984     59000
> >    100        1985     62000
> >    101        1970     18000
> >    101        1971     18500
> >    101        1972     20000
> >    101        1973     24000
> >
> > Basically, the data is a panel data, grouped by "FirmID", with
> > hundreds of frims. What I need to do is to calculate a moving
> > discounted sum of income for each firm-year. That is, calculate a sum
> > of income from a firm's first year to the current year, but each
> > year's income will be discounted by that year's distance to the
> > current year and the discount rate is the inverse of the distance
> > "1/(current year - year +1)". For example, for firm 100 at 1982, this
> > calculation would be like: 54000 + 51000*1/2 +50000*1/3, while for
> > firm 100 at 1984 it would be like 59000 + 60000*1/2 + 54000*1/3 +
> > 51000*1/4 + 50000*1/5. I tried the following program:
> >
> > by FirmID: gen seq=_n
> >
> > gen suminc=0
> >
> > quietly forval i=1/`=seq' {
> >            by FirmID: replace suminc = suminc + income[`i']/(`=seq' - `i'
> > +1)
> >            }
> >
> > But problems are: 1) the loop seems not allowing "by" command; 2) the
> > loop does not really launch, because even after I get rid of "by
> > FirmID" the loop seems to go only one cycle instead of "_n" cycles.
> >
> > Many many thanks for any help!
> >
> > Robin Luo
>
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```

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