Bookmark and Share

Notice: On March 31, it was announced that Statalist is moving from an email list to a forum. The old list will shut down at the end of May, and its replacement, statalist.org is already up and running.


[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]

Re: st: AW: mfx-Elasticity for a dummy variable


From   Nyasha Tirivayi <ntirivayi@gmail.com>
To   statalist@hsphsun2.harvard.edu
Subject   Re: st: AW: mfx-Elasticity for a dummy variable
Date   Thu, 10 Jun 2010 18:09:13 +0200

Dear Antonis

Yes you have the model correct. However, you earlier said the
elasticity was c*T instead of c/T.  Which is it then?

Kindly advise

Regards

Nyasha Tirivayi
Maastricht University

On Thu, Jun 10, 2010 at 11:11 AM, A Loumiotis
<antonis.loumiotis@gmail.com> wrote:
> your model is (correct me if i'm wrong):
>
> ln(y) = a + b ln(x) + c T + dZ + error
>
> The elasticity of y with respect to T is
> (dy/y)/(dT/T)=dln(y)/(dT/T)=(dln(y)/dT)/T=c/T.
>
> So, the elasticity of y with respect to T does not depend on the means
> of ln(x) and ln(y).  As I said in my previous reply it is equal to the
> coefficient of the dummy variable T divided by T (= c / T).  So the
> elasticity will be equal to "c"  only if you calculate it at T=1 and
> not at the mean of T.  It is your call but you should consider the
> drawbacks of computing elasticities with respect to dummy(discrete)
> variables.
>
> Antonis
>
> On Wed, Jun 9, 2010 at 6:15 PM, Nyasha Tirivayi <ntirivayi@gmail.com> wrote:
>> Dear Antonis and Martin
>>
>> Thanks for your reply. If you recall my model is as follows:
>>
>> ln(y) = a + b ln(x) + T + D Z
>>
>> I intend to calculate elasticity for T at T=1 and at means of ln(x)
>> and ln(Y). And if I do that the elasticity is the same as the
>> coefficient of T.
>>
>> Should I proceed with that as the answer?
>>
>> Kindly advise
>>
>> Nyasha Tirivayi
>> Maastricht University
>>
>> On Tue, Jun 8, 2010 at 1:27 PM, A Loumiotis <antonis.loumiotis@gmail.com> wrote:
>>> Yes I agree... although one can compute it at the mean point of T
>>> which is different from 0 or 1.  But as I said in my first response
>>> elasticities with respect to dummy variables have no meaningful
>>> interpretation.
>>>
>>> On Tue, Jun 8, 2010 at 2:18 PM, Martin Weiss <martin.weiss1@gmx.de> wrote:
>>>>
>>>> <>
>>>>
>>>> " ...will be the coefficient of the dummy
>>>>  variable T divided by the dummy variable itself."
>>>>
>>>>
>>>> I do not get this sentence. The dummy is either 0 or 1, as you said.
>>>> Dividing by zero is not permissible, and dividing by one does not change
>>>> anything, does it?
>>>>
>>>>
>>>>
>>>> HTH
>>>> Martin
>>>>
>>>> -----Ursprüngliche Nachricht-----
>>>> Von: owner-statalist@hsphsun2.harvard.edu
>>>> [mailto:owner-statalist@hsphsun2.harvard.edu] Im Auftrag von A Loumiotis
>>>> Gesendet: Dienstag, 8. Juni 2010 13:15
>>>> An: statalist@hsphsun2.harvard.edu
>>>> Betreff: Re: st: AW: mfx-Elasticity for a dummy variable
>>>>
>>>>  The elasticity of y with respect to the dummy variable in the way that
>>>>  you have defined your regression will be the coefficient of the dummy
>>>>  variable T divided by the dummy variable itself.
>>>>
>>>> On Tue, Jun 8, 2010 at 2:05 PM, A Loumiotis <antonis.loumiotis@gmail.com>
>>>> wrote:
>>>>> Nyasha,
>>>>>
>>>>> The elasticity of y with respect to the dummy variable in the way that
>>>>> you have defined your regression will be the coefficient of the dummy
>>>>> variable T times the dummy variable itself.  If you calculate it at
>>>>> the mean point of T then it will be different from the coefficient of
>>>>> the dummy variable.  If you calculate it at T=1, it will be the same.
>>>>>
>>>>> However elasticities with respect to dummy variables have no
>>>>> meaningful interpretation because the dummy variable changes in a
>>>>> discrete fashion (from 0 to 1).
>>>>>
>>>>> Antonis Loumiotis
>>>>>
>>>>> On Mon, Jun 7, 2010 at 6:24 PM, Nyasha Tirivayi <ntirivayi@gmail.com>
>>>> wrote:
>>>>>> Dear Martin
>>>>>>
>>>>>> Thanks for the code. Now the results are different. I was using the
>>>>>> wrong code i.e mfx , dyex at(mean) instead of mfx compute,
>>>>>> varlist(logweight) dyex at(mean).
>>>>>>
>>>>>> Regards
>>>>>>
>>>>>> Nyasha Tirivayi
>>>>>> Maastricht University
>>>>>>
>>>>>>
>>>>>>
>>>>>> On Mon, Jun 7, 2010 at 9:16 AM, Martin Weiss <martin.weiss1@gmx.de>
>>>> wrote:
>>>>>>>
>>>>>>> <>
>>>>>>>
>>>>>>> What is the difference of your example to this one - where the marginal
>>>>>>> effects do seem to change:
>>>>>>>
>>>>>>>
>>>>>>> *************
>>>>>>> sysuse auto, clear
>>>>>>> gen logprice=log(price)
>>>>>>> gen logweight=log(weight)
>>>>>>> reg logprice length logweight foreign
>>>>>>> mfx compute, varlist(logweight) dydx at(mean)
>>>>>>> mfx compute, varlist(logweight) eyex at(mean)
>>>>>>> mfx compute, varlist(logweight) dyex at(mean)
>>>>>>> mfx compute, varlist(logweight) eydx at(mean)
>>>>>>> *************
>>>>>>>
>>>>>>>
>>>>>>>
>>>>>>> HTH
>>>>>>> Martin
>>>>>>>
>>>>>>> -----Ursprüngliche Nachricht-----
>>>>>>> Von: owner-statalist@hsphsun2.harvard.edu
>>>>>>> [mailto:owner-statalist@hsphsun2.harvard.edu] Im Auftrag von Nyasha
>>>> Tirivayi
>>>>>>> Gesendet: Montag, 7. Juni 2010 02:50
>>>>>>> An: statalist@hsphsun2.harvard.edu
>>>>>>> Betreff: st: mfx-Elasticity for a dummy variable
>>>>>>>
>>>>>>> Dear All
>>>>>>>
>>>>>>> I am trying to estimate elasticity for a dummy explanatory variable in
>>>>>>> the following model
>>>>>>>
>>>>>>> ln(y) = a + b ln(x) + T + D Z
>>>>>>>
>>>>>>>
>>>>>>>
>>>>>>> I am interested in calculating the elasticity for T a dummy variable
>>>>>>> for a "treatment". What is the formula in stata? Is it mfx,dy/dx or
>>>>>>> mfx,dyex?
>>>>>>>
>>>>>>>
>>>>>>>
>>>>>>> I have done mfx,dyex and the result still remains the coefficient for
>>>>>>> T. Could it be that simple? Or there is another way ?
>>>>>>>
>>>>>>>
>>>>>>>
>>>>>>> Kindly advise
>>>>>>>
>>>>>>>
>>>>>>>
>>>>>>> Nyasha Tirivayi
>>>>>>>
>>>>>>> Maastricht University
>>>>>>> *
>>>>>>> *   For searches and help try:
>>>>>>> *   http://www.stata.com/help.cgi?search
>>>>>>> *   http://www.stata.com/support/statalist/faq
>>>>>>> *   http://www.ats.ucla.edu/stat/stata/
>>>>>>>
>>>>>>>
>>>>>>> *
>>>>>>> *   For searches and help try:
>>>>>>> *   http://www.stata.com/help.cgi?search
>>>>>>> *   http://www.stata.com/support/statalist/faq
>>>>>>> *   http://www.ats.ucla.edu/stat/stata/
>>>>>>>
>>>>>>
>>>>>> *
>>>>>> *   For searches and help try:
>>>>>> *   http://www.stata.com/help.cgi?search
>>>>>> *   http://www.stata.com/support/statalist/faq
>>>>>> *   http://www.ats.ucla.edu/stat/stata/
>>>>>>
>>>>>
>>>>
>>>> *
>>>> *   For searches and help try:
>>>> *   http://www.stata.com/help.cgi?search
>>>> *   http://www.stata.com/support/statalist/faq
>>>> *   http://www.ats.ucla.edu/stat/stata/
>>>>
>>>>
>>>> *
>>>> *   For searches and help try:
>>>> *   http://www.stata.com/help.cgi?search
>>>> *   http://www.stata.com/support/statalist/faq
>>>> *   http://www.ats.ucla.edu/stat/stata/
>>>>
>>>
>>> *
>>> *   For searches and help try:
>>> *   http://www.stata.com/help.cgi?search
>>> *   http://www.stata.com/support/statalist/faq
>>> *   http://www.ats.ucla.edu/stat/stata/
>>>
>>
>> *
>> *   For searches and help try:
>> *   http://www.stata.com/help.cgi?search
>> *   http://www.stata.com/support/statalist/faq
>> *   http://www.ats.ucla.edu/stat/stata/
>>
>
> *
> *   For searches and help try:
> *   http://www.stata.com/help.cgi?search
> *   http://www.stata.com/support/statalist/faq
> *   http://www.ats.ucla.edu/stat/stata/
>

*
*   For searches and help try:
*   http://www.stata.com/help.cgi?search
*   http://www.stata.com/support/statalist/faq
*   http://www.ats.ucla.edu/stat/stata/


© Copyright 1996–2014 StataCorp LP   |   Terms of use   |   Privacy   |   Contact us   |   Site index