Dear Statalisters: I have two variables x1 and x2 for which I want to test
the null hypothesis x1 = x2 (let's say 2 sided at the 10% level). I would
normally use Signtest which I believe takes x = x1 - x2 and compares x to a
binomial with mean 1/2. Thus, if you have 5 observations, such that x can be
written as the vector [1,2,3,4,5] you would reject the null. Now, add 1
million 0's to x and the Signtest (at least as it is implemented in Stata)
would still reject the null. However, at an "intuitive" level, it seems to
me that x1 and x2 are much more similar in the second case (with the million
observations where they are exactly the same) than in the original case. My
(very limited) understanding of the problem is that since the variables
should be continuous, an x of 0 happens with zero probability. Is there a
test which takes into account my "intuitive" understanding or is my
intuition simply wrong? I apologize for the non-Stata question. Thanks in
advance.
