Depreciating cumulative values of a variable

[Toby Kenward]

Hi all

I have a panel data set that lists the number of sales made by various companies across monthly time periods, from Q3 2007 to Q2 2014. The data set is unbalanced: not all companies have made sales in every time period.

The variables are respectively labelled Sales, Company and Quarter, and I have declared the data set as panel data using the command xtset Company Quarter.

I'm trying to create a variable (Company_experience) that depreciates the cumulative number of sales each company has made since the start of the data set, at a rate of 20% per quarter. I'd like to calculate the values of this variable for every quarterly time period.

Formally, Company_experience for company i in quarter t is given by:



Whereу_i,τ is the number of sales made by company i within time period τ, and δ is the depreciation rate.

Does anyone know how this can be done?

Many thanks
Toby

[Clyde Schechter]

Whatever it was you intended to attach to your post, it didn't actually come through. So we can't see your formula. While I think I know how depreciation is generally done, I'm not a finance person and would rather see precisely what you are looking for before crafting code. Please repost. You may need to try to emulate the equation in plain text and type it in: if you were trying to attach a screen shot or other picture, those are very problematic on this Forum and as often as not, they either don't come through or come through unreadable.