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From |
n j cox <n.j.cox@durham.ac.uk> |

To |
statalist@hsphsun2.harvard.edu |

Subject |
Re: st: How to generate a cumulative sum (capital stock) |

Date |
Thu, 25 Oct 2007 18:38:08 +0100 |

I don't see how anyone can comment on the previous

post mentioned so vaguely.

Forgetting the panel aspect for a moment,

gen K = k

replace K = 0.95 * K[_n-1] + I in 2/l

That is, you initialise a variable and

then -replace- all the first value.

[_n-1] is Stata's way of referring to

the previous value.

Now reinserting the panel aspect, you

need to work

by firm:

but -by:- won't let you work with -in-.

gen K = k

bysort firm (year) : replace K = 0.95 * K[_n-1] + I if _n > 1

should be closer to what you want.

If you -tsset-, the solution would be better as

tsset firm year

gen K = k

by firm: replace K = 0.95 * L.K + I if _n > 1

Nick

n.j.cox@durham.ac.uk

Damiano Rossi

I need some help to compute a capital stock series from a gross investment series. My primary problem is that I have to estimate the initial capital stock (K_0 ) for each firm. As a general rule, it is used the book value of fixed capital (K) in the first year of data (e.g. 1996) for each firm. How can I command Stata to consider this first observation (firm by firm) and then compute a capital stock series, using a perpetual inventory and a constant rate of depreciation? A previous post doesn't help me much on this point. These are the data.

Panl oif 300 firms, 10 years (1996-2006)

k = capital stock

I = capital investment

d [delta] = 0.05

The evolution of the real capital stock is:

K_t+i = (1 - d)*K_t+i-1 + I_t+i

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**Follow-Ups**:**st: Small bug with variable names in xtpoisson***From:*Paulo Guimaraes <guimaraes@moore.sc.edu>

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