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From |
Lulu Zeng <[email protected]> |

To |
"[email protected]" <[email protected]> |

Subject |
st: Random draw from log normal distribution with known mean and sd |

Date |
Mon, 27 Jan 2014 20:15:27 +1100 |

Dear Statalist, I am seeking your help on take random draws from a log normal distribution (with known mean and sd). I am aware similar question has been answered on below page but I didn't manage to solve my issue with this (http://www.stata.com/statalist/archive/2005-04/msg00999.html). I am trying to calculate Willingness to Pay (wtp) for a number of attributes (variables) of a random utility model (mixed logit in my case). wtp for a particular attribute is defined as the ratio of the coefficient for the attribute (e.g., engine performance) to the coefficient for the price variable. However, both of the engine performance and price coefficients are random in my model - performance is normally distributed & price is lognormal distributed. Given the difference in distribution for the two coefficients, I had to use simulation to work out the wtp. That means - take random draws from both distribution and divide one by another to work out a distribution for wtp. To achieve this, my first step was to take random draws from my log normally distributed price coefficient, which has a log mean & log sd of -0.22 and 0.74 respectively (equivalent to a normal mean & sd of -1.04 and 0.89 respectively). These figures are the results from my model (distribution of the coefficient). I used below code to take the draw as suggested by the webpage above (1200 draws): gen lognormal = exp(-1.04 + 0.89 * invnorm(uniform())) To check, I summed the resulting draws from the above, and the draws a mean of 0.53 & sd of 0.56. These figures are the same as the -0.22 and 0.74 I have above in log form, so I thought there must be something wrong. It would be really appreciated if I could have your help on this. Best Regards, Lulu * * For searches and help try: * http://www.stata.com/help.cgi?search * http://www.stata.com/support/faqs/resources/statalist-faq/ * http://www.ats.ucla.edu/stat/stata/

**Follow-Ups**:**Re: st: Random draw from log normal distribution with known mean and sd***From:*Alfonso Sánchez-Peñalver <[email protected]>

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