Re: st:compute wealth index score with PCA

[Wei Yee <weiyee20@gmail.com>]

Hi Friedrich,

Thank you very much for your help! I will try to compute the quintiles
with the weight variables.

Thanks again!

Best Regards,
Wei Yee.

On Mon, Sep 16, 2013 at 9:36 PM, Friedrich Huebler <fhuebler@gmail.com> wrote:
> Wei Yee,
>
> Your code is correct but your are not using any weights with the
> -xtile- command. I assume you run the -pca- command with data where
> one observation represents one household. Without weights in the
> subsequent -xtile- command, the resulting quintiles may not reflect
> the number of persons living in each household. If we assume that
> poorer households are larger, the quintiles may be unbalanced, with
> more persons allocated to the poorest quintile (identified by your
> variable score1_cat) and fewer persons allocated to the richest
> quintile. For example, if the total number of household members is
> 100, the distribution may look as follows:
>
> - Quintile 1: 30 persons
> - Quintile 2: 25 persons
> - Quintile 3: 20 persons
> - Quintile 4: 15 persons
> - Quintile 5: 10 persons
>
> Ideally, the quintiles should have 20 persons each, although this may
> not be possible if there is insufficient variation in the wealth
> scores. To create proper quintiles, add a weight variable with
> information on the number of household members to the -xtile- command.
>
> Friedrich
>
> On Wed, Sep 11, 2013 at 1:03 AM, Wei Yee <weiyee20@gmail.com> wrote:
>> Hi all,
>>
>> I am trying to compute a wealth index score and then categorized them
>> into quintiles. I have never done PCA or factor analysis before and
>> have spent the past few days reading up but I think I am still a
>> little confused. I really hope you guys will be able to shed some
>> light.
>>
>> I started with converting the questions/variables (eg. if they own a
>> tv, radio, mobile, flooring materials) to binary.Then I use the -pca-
>> command,
>> "pca naturalfloor rudimentaryfloor finishedfloor nonbiomass biomass
>> radio tv mobile nonmobile watch bike motorbike cart car motorboat",
>> followed by "predict score1".
>> Then, I use "xtile score1_cat = score1, nq(5)" to  categorized into quintiles.
>>
>> My questions are:
>> 1. Is this the correct method to obtain the quintiles representing
>> different categories of wealth?
>> 2. How is this different from using the command : -factor (var1, var2,
>> ..), pcf ?
>>
>> Any suggestions or feedbacks will be greatly appreciated. Thank you so
>> much in advance.
>>
>> Best Regards,
>> Wei Yee.
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