Mostly, I didn't know how the weights were or could be used in the median computation, but your explanation makes great sense. Basically, if the turnovers are sorted in ascending order, the asset-weighted median turnover is the one that first hits the cumulative 50% weight level.
Many thanks,
Eric
>I don't know why you thought otherwise, but the weights are
>applied to the medians too. In 1997, for example, as a total
>weight of 200 is assigned to .5 and a total weight of 197 is
>assigned to higher values, .5 emerges as the median.
>
>Nick
>[email protected]
>
>Eric G. Wruck
>
>> I have mutual fund data on turnover & total net assets. Below you'll
>> see an example:
>>
>>
>> +-----------------------+
>> | year turnover tna |
>> |-----------------------|
>> 1. | 1997 .5 200 |
>> 2. | 1997 .73 172 |
>> 3. | 1997 1.1 25 |
>> 4. | 1998 .61 255 |
>> 5. | 1998 .96 220 |
>> |-----------------------|
>> 6. | 1998 .85 75 |
>> +-----------------------+
>>
>>
>> I want to get an asset-weighted average turnover ratio as well as
>> report median turnover.
>>
>> I issue the command:
>>
>> . collapse (mean) avgturn=turnover (median) medturn=turnover
>> [aweight=tna], by(year)
>>
>> & obtain
>>
>> +---------------------------+
>> | year avgturn medturn |
>> |---------------------------|
>> 1. | 1997 .6374307 .5 |
>> 2. | 1998 .7827273 .85 |
>> +---------------------------+
>>
>> The average turnover ratios are precisely what I want, but I don't
>> understand what Stata is doing with the medians. I thought the
>> weights wouldn't enter into the calculations & that I would obtain
>> medians of 0.73 & 0.85 for 1997 & 1998. However, for 1997 I get a
> > median turnover of 0.5. Would somebody kindly explain this to me?
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