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st: Constructing an Asset Index in Stata‹Discrepancy between predict command and hand calculations


From   Jennnifer Callaghan <jcallagh@jhsph.edu>
To   "statalist@hsphsun2.harvard.edu" <statalist@hsphsun2.harvard.edu>
Subject   st: Constructing an Asset Index in Stata‹Discrepancy between predict command and hand calculations
Date   Mon, 3 Jan 2011 13:24:55 -0500

Hello and Happy New Year,

I am trying to find out what calculations Stata uses to calculate an asset
index using the predict command.  I am following the commands given by the
World Bank ( in the book Analyzing Health Equity Using Household Survey
Data, by O'Donnell, Van Doorsslaer, Wagstaff, and Lindelöw) and I am using
the following commands:
 
factor $assets if rural==1, pcf factors(1)
predict asset_index if rural==1
sum asset_index
xtile quintile=asset_index if rural==1 [aw=hhweight], nq(5)
 
I am developing the asset index using MICS household survey data to apply to
a client exit interview where asset data was collected.  The problem that I
am running into is that when I calculate the asset score for a household by
hand I get different maximum and minimum asset scores than what stata
provides.  I am using the formula provided in the WB bank, to sum the scores
for each asset for each household.  The score for an asset when it is
present is equal to 1 minus the mean, divided by the SD, times the factor
loading.  The score when the asset is absent is equal to 0 minus the mean,
divided by the SD, times the factor loading.
 
Can anyone tell me if stata uses the same formula or if it adjusts the
formula when predicting an asset index?  I am trying to figure out why I get
VERY different scores from the hand calculation.
 
Thank you very much in advance!

Jennifer



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