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# Re: st: Dependent ordered variable

 From Nick Cox To statalist@hsphsun2.harvard.edu Subject Re: st: Dependent ordered variable Date Mon, 28 May 2012 09:07:40 +0100

```This seems to be a question about an ordered _independent_ variable.
(Like David Hoaglin and many others I don't use that term willingly,
and here's another reason: it's so easy to confuse dependent and
independent.)

I guess willdly that there is a substantial literature in your field
discussing how to turn credit rating into a numerical score. I guess
this because even as an outsider it's easy to imagine dozens
(hundreds, thousands...) of studies wanting to use credit rating as a
predictor just like you. Whether that's a good idea I couldn't say,
but my point is simply that there must be a literature on this.
Expecting Statalist to stand in for a basic literature search is not a
good idea.

-xi3- is a user-written program from ?. From what I recall it can't
add to what is possible with -xi:-. In fact, (1), (2) and (3) look
essentially the same with the correction that credit rating would need
to be handled as a series of indicator variables. (I don't willingly
use the name dummy variable, so it's so often misinterpreted by
non-statistical people.)

Nick

On Mon, May 28, 2012 at 8:52 AM, Tobias Bertschinger
<tobias.bertschinger@uzh.ch> wrote:

> I'm currently analyzing data which have an approximately normal distributed dependent variable Y (dependent_var) and I also have a couple of dependent variables.
> I want to test the influence of credit ratings (ordered, e.g. AAA, AA+, AA, AA-...) as the main independent variable and a couple of control variables.
>
> What kind of test should i use?
> Are there other tests than:
> (1) include the credit rating as a dummy variable
> (2) use xi: regress dependent_var i.credit_rating control_vars
> (3) use xi3: regress dependent_var b.credit_rating control_vars
> ?
>
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```