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Re: Re: st: Adjust command |

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Mon, 21 Apr 2003 09:37:23 -0500 |

Ricardo Ovaldia <[email protected]> asks: > So let me see if I understand, when I type -adjust > mpg,by( foreign)- , mpg is set to the overall mean for > mpg, and if I type -adjust,by(foreign)-, (without > specifying mpg) then mpg is set to the mean of mpg > within each foreign level. Correct? Yes. > Regarding my first question, I understand that it > depends on the question that I want answered, what I > don't understand is what question is being answered by > each of the two approaches. Specifically if I type: > > . regress price mpg foreign > . adjust , by( foreign) se > or > . regress price mpg > . adjust, by( foreign) se > > What are these two adjusts telling me? Well, you are starting with two different regression models. In the first one you include foreign in your regression model. So that you get price = 11905.42 - 294.1955 * mpg + 1767.292 * foreign as the estimated regression equation. Now the -adjust- command . adjust , by( foreign) se says to produce a table with two rows. The first row has foreign set to 0 and the second row has foreign set to 1. Since mpg was not mentioned in the -adjust-, it is set to the mean of mpg (the mean being computed over the observations where foreign is 0 or 1 respectively -- which is 19.82692 and 24.77273 for the auto data). So the two predicted values shown by adjust are: predicted price when foreign is 0 = 11905.42 - 294.1955 * 19.82692 + 1767.292 * 0 = 6072.4294 predicted price when foreign is 1 = = 11905.42 - 294.1955 * 24.77273 + 1767.292 * 1 = 6384.6863 In the second case your regression model is price = 11253.06 - 238.8943 * mpg and the -adjust- command is giving you predicted price when foreign is 0 = 11253.06 - 238.8943 * 19.82692 = 6516.5218 predicted price when foreign is 1 = 11253.06 - 238.8943 * 24.77273 = 5334.996 In this second case, foreign is not in your regression model, but it is used in the -by()- option of -adjust- which restricts the sample over which the mean of mpg is computed (so that for foreign == 0 has a mean of 19.82692 compared to a mean of 24.77273 when foreign was 1). Many people would prefer to use your first regression model regress price mpg foreign and then follow that with adjust mpg , by(foreign) se So that mpg is set to the grand mean (21.297297). That makes the two rows produced by -adjust- more directly comparable. Or maybe instead of letting mpg be set to the grand mean, you pick a particular value you would like to compare them with. adjust mpg = 25 , by(foreign) se Does this explanation help? Ken Higbee [email protected] StataCorp 1-800-STATAPC * * For searches and help try: * http://www.stata.com/support/faqs/res/findit.html * http://www.stata.com/support/statalist/faq * http://www.ats.ucla.edu/stat/stata/

**Follow-Ups**:**Re: Re: st: Adjust command***From:*Ricardo Ovaldia <[email protected]>

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