Hi,
I am using a dataset of the 61st and 68th rounds of survey by the National Sample Survey Organization of India. It is a household level dataset The variables in the dataset are state, sector, household id, person id, the monthly per capita consumption expenditure (MPCE), the item codes of the commodities consumed, their total quantity consumed, year and a weight variable. The variables that I have included from an external data source into this dataset are the Value Added Rates of taxation of the items and the State domestic products.
I intend to find out the effect of VAT on the MPCE ( log Real MPCE in this case) for each item of consumption. I want to carry out this regression using the quintile division of MPCE and the quintile division of the states' domestic products i.e. how does the effect differ across the different divisions of MPCE and also if the states are divided according to their domestic products.
The commands that I have used to create the quintiles are :
gen quintile1 = 0
replace quintile1 =. if RealMPCE ==.
replace quintile1=1 if RealMPCE >=0 & RealMPCE<= 31746.03
gen quintile2 = 0
replace quintile2 =. if RealMPCE ==.
replace quintile2=1 if RealMPCE >= 31772.49 & RealMPCE<= 476190.5
gen quintile3 = 0
replace quintile3 =. if RealMPCE ==.
replace quintile3=1 if RealMPCE >= 477513.2
Similarly, for the states,
gen Statequintile1 = 0 if year ==2004
replace Statequintile1 =. if SDP ==.
replace Statequintile1 =1 if SDP>=0 & SDP<= 1.67e+12
gen Statequintile2 = 0 if year ==2004
replace Statequintile2 =. if SDP ==.
replace Statequintile2 =1 if SDP>=2.03e+12 & SDP<= 4.15e+12
gen Statequintile3 = 0 if year ==2004
replace Statequintile3 =. if SDP ==.
replace Statequintile3 =1 if SDP>= 4.79e+13
After doing this, what is the command that I should follow? I was trying
regress logRealMPCE VATrate i.year if ic==101 & quintile1==1 [pweight = weight], vce(cluster state) initially. However, the problem was the VAT rates were getting dropped for quintile 1 and State quintile 1 if I am using this command. STATA says the VAT rates are omitted due to collinearity. Then I tried using qreg instead of regress. The same problem arises there too. What should be the exact command that I should follow if I want to conduct this quintile regression?
Thanks and regards,
Meghna
I am using a dataset of the 61st and 68th rounds of survey by the National Sample Survey Organization of India. It is a household level dataset The variables in the dataset are state, sector, household id, person id, the monthly per capita consumption expenditure (MPCE), the item codes of the commodities consumed, their total quantity consumed, year and a weight variable. The variables that I have included from an external data source into this dataset are the Value Added Rates of taxation of the items and the State domestic products.
I intend to find out the effect of VAT on the MPCE ( log Real MPCE in this case) for each item of consumption. I want to carry out this regression using the quintile division of MPCE and the quintile division of the states' domestic products i.e. how does the effect differ across the different divisions of MPCE and also if the states are divided according to their domestic products.
The commands that I have used to create the quintiles are :
gen quintile1 = 0
replace quintile1 =. if RealMPCE ==.
replace quintile1=1 if RealMPCE >=0 & RealMPCE<= 31746.03
gen quintile2 = 0
replace quintile2 =. if RealMPCE ==.
replace quintile2=1 if RealMPCE >= 31772.49 & RealMPCE<= 476190.5
gen quintile3 = 0
replace quintile3 =. if RealMPCE ==.
replace quintile3=1 if RealMPCE >= 477513.2
Similarly, for the states,
gen Statequintile1 = 0 if year ==2004
replace Statequintile1 =. if SDP ==.
replace Statequintile1 =1 if SDP>=0 & SDP<= 1.67e+12
gen Statequintile2 = 0 if year ==2004
replace Statequintile2 =. if SDP ==.
replace Statequintile2 =1 if SDP>=2.03e+12 & SDP<= 4.15e+12
gen Statequintile3 = 0 if year ==2004
replace Statequintile3 =. if SDP ==.
replace Statequintile3 =1 if SDP>= 4.79e+13
After doing this, what is the command that I should follow? I was trying
regress logRealMPCE VATrate i.year if ic==101 & quintile1==1 [pweight = weight], vce(cluster state) initially. However, the problem was the VAT rates were getting dropped for quintile 1 and State quintile 1 if I am using this command. STATA says the VAT rates are omitted due to collinearity. Then I tried using qreg instead of regress. The same problem arises there too. What should be the exact command that I should follow if I want to conduct this quintile regression?
Thanks and regards,
Meghna
