Re: Re: st: Is it valid to use the individual ratios (i.e. Xi/Yi) in the dependent or independent part of a regression model?

[Christopher Baum <kit.baum@bc.edu>]

<>
On May 27, 2012, at 8:33 AM,  J-Y  wrote:

> My point is that the mean and se are different between that obtained
> by the "ratio" (which is supposedly to be more accurate) and the
> "regress" command. Thus, the results obtained by the "regress" command
> may be invalid. My question is: how to analyze ratios as the dependent
> or independent variables in regression if the mean and se of (Xi/Yi)
> is incorrect.

You don't even need -regress-: just use -summarize-, -mean- or -means-. The point is that, per the [r] ratio description,
the estimate calculated by -ratio- is the ratio of the means, not the mean of the ratio. I'm sure there is some reason
to compute the estimator that way (probably due to wanting to analyse complex survey data) but you should not
expect that -ratio- estimates the mean of the ratio, calculated for each observation.

In short, R.T.F.M.

Kit


Kit Baum   |   Boston College Economics & DIW Berlin   |   http://ideas.repec.org/e/pba1.html
                             An Introduction to Stata Programming  |   http://www.stata-press.com/books/isp.html
  An Introduction to Modern Econometrics Using Stata  |   http://www.stata-press.com/books/imeus.html


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