st: RE: Price Index

[Nick Cox <n.j.cox@durham.ac.uk>]

Let me outline solutions for two situations. 

1. Suppose you have a single item whose price you are monitoring. 

Then 

su price if time == 495

gen priceindex = 100 * price / r(mean) 

I am clearly assuming that you want 100 as your base. 

2. However, I imagine you would not be asking if that was the problem. Your question implies something like a panel structure. 

Then you could reach for something more like 

egen priceindex = total(price / (time == 495)), by(panelid) 

or 

egen priceindex = total(price * (time == 495)), by(panelid)

followed by 

replace priceindex = 100 * price / priceindex 

The logic is that -time- of 495 occurs just once in each panel. You should check that. 

You could squeeze that into one command, no doubt, but I guess with some loss of clarity. 

Nick 
n.j.cox@durham.ac.uk 

A.Silva

I need to create a price index using a base price.
How can I indicate to Stata to use always the same observation as a base (in my example time==495)?
For example, my variables are:
time price
495 20
496 22
497 23


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