Hello Erasmo,
you may want to have a look at cluster analysis, which is a scientific
way of separating data into clusters of "similar" objects. Some of the
methods will automatically choose the number of clusters based on your
data. Note that it will be increasingly hard to plot the data if you
come from 2 dimensions to higher dimensions, so graphical
representation might not be as convincing as formal analysis. Stata is
capable to perform some of the standard cluster analysis procedures.
Best regards,
Sergiy Radyakin
On 10/10/07, Erasmo Giambona <[email protected]> wrote:
> Dear Statalisters,
>
> I have a cross section of firm-level data. If I plot the data
> according to firm debt and growth opportunities, it seems that the
> data is separating into 2 distinct regions. In the first region there
> are firms with very low debt and high growth and in the second region
> firms with very high debt and low growth. Is there a test to check
> whether indeed there is separation in the data? Is there a way to
> handle this with inregression?
>
> Any suggestions would be appreciated.
> Erasmo
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