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Re: st: command stata

From   Maarten Buis <[email protected]>
To   [email protected]
Subject   Re: st: command stata
Date   Fri, 26 Aug 2011 09:46:36 +0200

2011/8/26 Donsaane Dontsi Saatena :
> I am looking for stata's command in order to group many variables into one.
> Let's say we have: roads, water , electricity, and we want to group them
> into one variable: infrastructures.

--- Rich Williams proposed
> Does -egen- with the group function do what you want?

What Rich proposes is in essence to create one categorical variable
that has a unique value for each combination of values on each of the
three variables. I read this question differently. I interpret it that
you want to make a metric variable that indicates how good the
infrastructure is.

Here there is a subtle but important distinction between whether you
believe that the observed variables influence the latent variable or
the other way around. Consider an intelligence test; here we believe
that there is some latent intelligence that makes people answer
questions right or wrong, so the observed variables (whether or not
questions were answered correctly) are caused by the latent variable.
In your case it makes more sense to think of roads, water and
electricity as feeding into a pool of resources that we labelled
infrastructure, so now it is the observed variables that cause the
latent variable. In the former situation you would use factor analysis
and their kin, in the latter (your) situation you would use sheaf
coefficients, models with parametrically weighted covariates or MIMIC
models. These have been implemented in Stata in the -sheafcoef- and
-propcnsreg- packages, which can be obtained from SSC by typing in
Stata -ssc install sheafcoef- and ssc install propcnsreg-. You can
find out more about them here:

Hope this helps,

Maarten L. Buis
Institut fuer Soziologie
Universitaet Tuebingen
Wilhelmstrasse 36
72074 Tuebingen
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