SHAZAM Questions and Answers (Q&A) - RSS feedhttp://community.econometrics.com/questions/SHAZAM Econometrics, Statistics and Analytics Communityen<font color="white">Copyright <b>SHAZAM Analytics, 2018</b></font>Fri, 25 Apr 2014 15:21:34 +0000Estimating Divisia index for expenditure variableshttp://community.econometrics.com/question/500/estimating-divisia-index-for-expenditure-variables/Hi All,
I want to aggregate expenditure variables using a Divisia index (aggregate of labour, deprecation and other costs).
I saw some examples in the manual where the commands require price and quantity information like:
Index p1 q1 p2 q2 to estimate price index or
index q1 p1 q2 p2 to estimate quantity index
In my case I have cross-sectional data and the variables are expenses (there is no quantity in it) with some observation have a value of zero expenses.
how can I estimate the Divisia index? As I said, there are some observations which have zero value for some of the expenses. How do these zero values affect the estimation of the Divisia index?
Thanks for the help.
Sirak
Wed, 23 Apr 2014 02:36:20 +0000http://community.econometrics.com/question/500/estimating-divisia-index-for-expenditure-variables/Answer by SHAZAMHelp for <p>Hi All,
I want to aggregate expenditure variables using a Divisia index (aggregate of labour, deprecation and other costs).
I saw some examples in the manual where the commands require price and quantity information like:
Index p1 q1 p2 q2 to estimate price index or
index q1 p1 q2 p2 to estimate quantity index</p>
<p>In my case I have cross-sectional data and the variables are expenses (there is no quantity in it) with some observation have a value of zero expenses.
how can I estimate the Divisia index? As I said, there are some observations which have zero value for some of the expenses. How do these zero values affect the estimation of the Divisia index?
Thanks for the help.
Sirak</p>
http://community.econometrics.com/question/500/estimating-divisia-index-for-expenditure-variables/?answer=501#post-id-501Division by zero will cause estimation to fail. Typically you might exclude the observations, substitute with a very small number or perhaps interpolate (while qualifying your results).Wed, 23 Apr 2014 12:48:23 +0000http://community.econometrics.com/question/500/estimating-divisia-index-for-expenditure-variables/?answer=501#post-id-501Comment by Sirak for <p>Division by zero will cause estimation to fail. Typically you might exclude the observations, substitute with a very small number or perhaps interpolate (while qualifying your results).</p>
http://community.econometrics.com/question/500/estimating-divisia-index-for-expenditure-variables/?comment=502#post-id-502Thanks ShazamHelp. What about the way of estimating DAVISIA index for expenditures? could you please advise on how to aggregate expenditure variables by estimating Davisia index?
Thanks once again.
SirakThu, 24 Apr 2014 05:41:17 +0000http://community.econometrics.com/question/500/estimating-divisia-index-for-expenditure-variables/?comment=502#post-id-502Comment by Sirak for <p>Division by zero will cause estimation to fail. Typically you might exclude the observations, substitute with a very small number or perhaps interpolate (while qualifying your results).</p>
http://community.econometrics.com/question/500/estimating-divisia-index-for-expenditure-variables/?comment=503#post-id-503Thanks a lot. What about the estimation procedure? As I have said I have cross-sectional data and the variables are expenses, would you please advise on the methodological aspect. Thanks in Advance.
SirakThu, 24 Apr 2014 06:27:23 +0000http://community.econometrics.com/question/500/estimating-divisia-index-for-expenditure-variables/?comment=503#post-id-503Comment by SHAZAMHelp for <p>Division by zero will cause estimation to fail. Typically you might exclude the observations, substitute with a very small number or perhaps interpolate (while qualifying your results).</p>
http://community.econometrics.com/question/500/estimating-divisia-index-for-expenditure-variables/?comment=504#post-id-504Expenditure data is naturally a product of price and quantity so to work with the Price Index methods you would need to decompose expenditure by dividing expenditure by price to get quantity. But if you only have one series on expenditure then probably you can't do much with it.Fri, 25 Apr 2014 15:21:34 +0000http://community.econometrics.com/question/500/estimating-divisia-index-for-expenditure-variables/?comment=504#post-id-504