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Re: st: composite index
At 08:39 PM 11/16/2006, Joon G. Park wrote:
Hi,
I have a quick question on creating a composite index. I've searched
for this topic on Stata listserv, but without success.
But, anyways, here is my situation:
I have the following three variables:
Variable "A" (Scale: millions; range: from hundreds of thousands to
millions; Unit: dollar)
Variable "B" (Scale: hundreds; Range: from single digits to three
double digits; Unit: "size")
Variable "C" (Scale: hundreds; Range: from less than ten to tens of
thousands; Unit: personnel)
I would like to have equal weights attached for each variable that
will comprise the composite index (I may use weighted index later
on, depending on how my theory works out). This would seem
accomplished easily enough via "generate" command with relevant math syntax.
I guess the question is, why would you think that equal weights are
appropriate, given how different the scales are? You could do
rescalings, but if you do that that is the same as using different
weights. It seems like a factor analysis makes as much sense as
anything, assuming you even want to create a scale in the first
place. Or, maybe create z-scores from the 3 variables and add them together.
-------------------------------------------
Richard Williams, Notre Dame Dept of Sociology
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