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st: Generating indices over nominal data?

From   Andrea Bennett <>
Subject   st: Generating indices over nominal data?
Date   Thu, 21 Jun 2012 12:21:38 +0200


I wonder if anyone has a deeper understanding
 of generating a summary index over a set of 
nominal data. Consider the following case:

I have data on individual background knowledge 
on 10 different topics. 3 of the topics are theoretically 
similar (e.g. knowledge on public goods or 
common pool resources or market externalities 
could be considered as linked). For each item I have 
a 3-point scale that says "no knowledge", 
"some minor knowledge", and "deepened knowledge".

I use all of the 3 linked items as unique controls in a regression,
 that is a dummy of each item and level. However, 
this becomes tedious when interacting my treatment 
variable with each of these items separately. Still 
I do not feel very confident aggregating all three variables 
since one item might be more relevant that the other. 

Still, if anyone has more info about generating an index in 
such a situation, that would be pretty helpful to me.

Best regards, Andrea

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