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Re: st: composite index


From   Richard Williams <Richard.A.Williams.5@ND.edu>
To   statalist@hsphsun2.harvard.edu
Subject   Re: st: composite index
Date   Thu, 16 Nov 2006 22:12:41 -0500

At 08:39 PM 11/16/2006, Joon G. Park wrote:
Hi,

I have a quick question on creating a composite index. I've searched for this topic on Stata listserv, but without success.

But, anyways, here is my situation:

I have the following three variables:

Variable "A" (Scale: millions; range: from hundreds of thousands to millions; Unit: dollar)

Variable "B" (Scale: hundreds; Range: from single digits to three double digits; Unit: "size")

Variable "C" (Scale: hundreds; Range: from less than ten to tens of thousands; Unit: personnel)


I would like to have equal weights attached for each variable that will comprise the composite index (I may use weighted index later on, depending on how my theory works out). This would seem accomplished easily enough via "generate" command with relevant math syntax.
I guess the question is, why would you think that equal weights are appropriate, given how different the scales are? You could do rescalings, but if you do that that is the same as using different weights. It seems like a factor analysis makes as much sense as anything, assuming you even want to create a scale in the first place. Or, maybe create z-scores from the 3 variables and add them together.


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Richard Williams, Notre Dame Dept of Sociology
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