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Re: st: Standard error of a ratio of two random variables


From   Steven Samuels <[email protected]>
To   [email protected]
Subject   Re: st: Standard error of a ratio of two random variables
Date   Thu, 15 Jan 2009 10:20:57 -0500

Sergiy-
The -ratio- and -svy: ratio- commands in Stata ignore observations with missing values in X or Y. So do the Stata programs that you and Austin wrote. You risk bias if you estimate numerator and denominator separately (ignoring missing values in each); and, if you do that, I don't know of simple way of getting standard errors. Of course you also risk bias if you use only complete cases. I think that the best approach would be multiple imputation of X and Y. Then use the standard commands. I'd guess that there are good prospects for predicting your variable "A", at least.

By the way, I often compute SE's for log(X/Y) (use -nlcom- after - ratio- or -svy: ratio-) and transform to CI's for X/Y. That way, a CI for X/Y is consistent with that for Y/X.

-Steve




On Jan 14, 2009, at 3:36 PM, Sergiy Radyakin wrote:

On Tue, Jan 13, 2009 at 12:01 PM, Austin Nichols
<[email protected]> wrote:
Sergiy Radyakin <[email protected]>:
With different N's you would divide by the product of the sqrt of N1
and N2 instead. My point was just to point out what you would need to multiply rho if you wanted to keep rho for some reason. And yes, this
is all approximation--if X and Y were normal you might consult
http://www.jstor.org/stable/pdfplus/2334671.pdf

But the example does not seem to bear very well on your actual
application--are the X and Y two variables on the same survey with
different degrees of missingness?  The approach given so far does not
seem the optimal solution in that case...

Thank you Austin, the X and Y are coming from the same survey.

To make things more clear, and since Steven Samuels asked
specifically, here is what I am doing:

I need the mean and the SE for the following indicator "Primary
Completion Rate is: new entrants in the last grade divided by
population being in the last grade and of the proper age (for the last
grade)". (with a slightly different wording the definition of PCR and
details are here:
[http://www.un.org/esa/sustdev/natlinfo/indicators/ methodology_sheets/education/intake_education.pdf]
on the first page of the document(see "(b) brief definition")

The definition uses the following characteristics:
[A] being a new entrant (of any age)
[B] being of proper age, e.g. 12y.o., and

Being a new entrant is known if response to the "grade in previous
year" is known, which is subject to recall error, has more missings
than age, etc.

Not all As are Bs and not all Bs are As.

So far I am estimating separately (with svy:total) the numerator and
denominator. Stata returns me the two numbers for each: the mean and
SE.
I then need the mean and SE of the ratio of these two. They are
expected to be well away from zero (if this constitutes a problem),
but note that the ratio is not a proportion, it can be more than 100%.
I then use the formula (see the program in the first post and the
quoted PDF file) to construct the SE for the ratio of the two.

Austin mentioned that there might be a better solution. I hope this
information may help to determine if there is really something better
to do. I don't care about computing time, but  correctness and
conceptual unambiguity are of highest importance.

Thank you, Sergiy Radyakin












On Tue, Jan 13, 2009 at 11:35 AM, Sergiy Radyakin
<[email protected]> wrote:
Dear All,

thank you for your responses. Austin's solution to remove rho helped a
lot, but I am a bit confused with the other alternative that he
proposed, namely "keep the rho, but divide by N". What would N be in
the case, where the mean of X is be computed on one domain, and mean
of Y on another? (e.g. because of the missings). For example, X is
income, and Y is family size, and I were interested in per capita
income, but income was less often reported than family size. My
observation is that Stata stops with error "no observations" in case
when domains of X and Y do not overlap at all, but there is nothing in the formula that prevents me from computing (approx) moments of X/ Y in
this case. Should I restrict computations to the common domain where
both X and Y are not missing for some reason?

Alan, thank you for the comments regarding not existance of moments in case the the X and Y are N(0,s2). In my case the expectations of X and Y are guaranteed to be non-zero as they are the numbers of people with
non-exotic characteristics (like attending primary school).

Thank you,
   Sergiy Radyakin
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