Re: st: cascading dummies

[Shikha Sinha <shikha.sinha414@gmail.com>]

Thanks!

Shikha

On Mon, Oct 1, 2012 at 12:15 PM, Nick Cox <njcoxstata@gmail.com> wrote:
> As Richard said, Stata can tell you:
>
> . findit cascade
>
> STB-6   srd11 . . . . . . . . . Generating ordered "cascading" dummy variables
>         (help cascade if installed) . . . . . . . . . . . . . . . R. Goldstein
>         3/92    pp.19--22; STB Reprints Vol 1, pp.190--194
>         add a set of new dummy variables that are cascading; that is,
>         0/1 variables are created where a 1 is given if the case has
>         the value <= value of lowest category
>
> Accessible at http://www.stata.com/products/stb/journals/stb6.pdf
>
> Nick
>
> On Mon, Oct 1, 2012 at 7:59 PM, Shikha Sinha <shikha.sinha414@gmail.com> wrote:
>> Thanks Richard!
>>
>> very helpful. What is the full reference of STB article, I am unable to find it.
>
> On Mon, Oct 1, 2012 at 11:39 AM, Richard Goldstein
>> <richgold@ix.netcom.com> wrote:
>
>>> neither is wrong or right -- they answer slightly different questions; A
>>> asks for each dummy whether, and by how, much it is different from the
>>> reference group (you do realize that you should only include 4 of the
>>> dummies, right?); B asks whether each differs from the preceding level
>>>
>>> you can -findit cascade- to find a program I wrote to implement
>>> cascading dummies; the help file, and even more the STB article,
>>> discusses the differences; note that you can obtain the answer to either
>>> question by following up the original method of forming the variables
>>> with the appropriate -test- command(s)
>
> On 10/1/12 2:31 PM, Shikha Sinha wrote:
>
>>>> Recently, I came across a new way of creating dummies and I wonder
>>>> what the group thinks about this form.
>>>>
>>>> The independent variable X is coded as 1- very poor, and 5 as very
>>>> rich. I want to estimate the effect by wealth quintile. I created the
>>>> dummy the following ways, but I was told that this is wrong (A is
>>>> wrong). The correct way to construct dummy is B and is called
>>>> cascading dummies. I have never come across this before and would
>>>> appreciate if you could shed light on the difference between the two
>>>> and which is the correct way of creating dummies.
>>>>
>>>> A:
>>>> id    Y       X1 (scale of 1-5),      dum1    dum2    dum3    dum4    dum5
>>>> 1     100     5       0       0       0       0       1
>>>> 2     200     4       0       0       0       1       0
>>>> 3     300     3       0       0       1       0       0
>>>> 4     239     2       0       1       0       0       0
>>>> 5     345     1       1       0       0       0       0
>>>>
>>>>
>>>> B:
>>>> id    Y       X1 (scale of 1-5),      dum1    dum2    dum3    dum4    dum5
>>>> 1     100     5       1       1       1       1       1
>>>> 2     200     4       1       1       1       1       0
>>>> 3     300     3       1       1       1       0       0
>>>> 4     239     2       1       1       0       0       0
>>>> 5     345     1       1       0       0       0       0
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