# st: R: average rate of growth - help

 From "Carlo Lazzaro" To Subject st: R: average rate of growth - help Date Sun, 11 Nov 2007 12:10:36 +0100

```Daniele wrote:
Dear all, I need to compute the "average rate of growth of variable -y-,
over the previous three years".
Could somebody help me with the command? Thanks in advance.

Daniele

Dear Daniele:

- I suppose that your question refers to the Compound Average Growth Rate
(CAGR). Considering a variable Y (which is assumed to take on the following
values: 1 in the first year; 2 in the second as well as inn the third year)
followed-up for a three-year span of time, the CAGR formula is.

[(Y Value year 3 / Y Value year 1)^(1/3) -1].

- translated into Stata command, it might sound like the following example

--------------------------------begin example-------------------------------
set obs 3
obs was 0, now 3
gen Year=_n
gen Y= 1
replace Y=2 in 2/3
gen CAGR=(Y[3]/Y[1])^(1/3)-1 in 3
------------------------------- end example---------------------------------

HTH and Kind Regards,

Carlo

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```