Generating a 95th percentile indicator variable

[charles krumsiek]

Hi, I am a senior in college working on an economics thesis.

I am trying to generate a dummy variable which would yield 1 if the observation is in the 95th percentile of the variable and a 0 otherwise. The variable in question is "inflation" and the new variable would be named "extremeinflation". The data is panel, not sure if this would make a difference in the syntax that I need.


I believe I should be using the command pctile in some kind of manner but I am confused on the exact syntax that I should be using.


Anything helps!

Thank you very much.

[Clyde Schechter]

The data is panel, not sure if this would make a difference in the syntax that I need.

Well, it's hard to say because your question is not stated clearly enough. Do you want a 95th percentile separately within each panel, or do you want an overall 95th percentile for inflation across all panels? The syntax would, indeed, be different.

[Nick Cox]

Clyde Schechter made a good point. In addition, I guess you want an indicator for being above, or above or equal to, the 95th percentile. I would not recommend the terminology “in the 95th percentile” for either.

[charles krumsiek]

Sorry for not being clear. My inflation data is panel and I am only looking to find the observations that occur when equal to or greater than the 95th percentile. So I would be looking an overall 95th percentile across all panels.

[Nick Cox]

summarize, detail will give you the 95th percentile after which you create an indicator.

[charles krumsiek]

Thank you, Nick!