Creating dummy variable equal to one if current mean is one standard deviation above/below the historical mean

[Jerome Dolling]

Hello everybody,

I am trying to create a dummy variable that is equal to one of current rainfall in a given district (avgrf) is one standard deviation below or above the historical mean of rainfall in that district (lravgrf). I also want to create a dummy equal to one if the current rainfall falls within the range of one standard deviation.

Does anyone have any suggestions on how to do that?

Best, Jérôme

[Ken Chui]

Please follow the FAQ (http://www.statalist.org/forums/help) and use -dataex- to post some example data. Given there is no data example, I'd probably start with -egen std()-, with a -by- option for each district.

Also, it's not clear what the historical rainfall is. Is it the mean of all the data, or the mean of all the data prior to time, t, and will get updated whenever it move to the next time point, t+1?

[Carlo Lazzaro]

Jerome:
I do share Ken's concern (and related recommendations) about your research goal.
That said, I've tried to sketch a possible toy-example as far as your first question is concerned:

. use "https://www.stata-press.com/data/r16/nlswork.dta"
(National Longitudinal Survey.  Young Women 14-26 years of age in 1968)

. quietly sum ln_wage

. scalar hist_mean=r(mean)

. scalar hist_sd=r(sd)

. bysort idcode: gen wanted_1=1 if ln_wage<(hist_mean-hist_sd) | ln_wage>(hist_mean+hist_sd)

[Nick Cox]

The definitions here are less than clear. My guess is that you would be better off with a variable that is

1 if rainfall > mean + SD

0 if mean - SD < rainfall < mean + SD

-1 if rainfall < mean - SD

missing if rainfall missing.

The wish to degrade to indicator variables (you say "dummy") is not obviously an improvement over using (rainfall - mean) / SD as a variable.

[Jerome Dolling]

Hey Ken, Thank you. I included the example data in here. The historical mean contains all data prior to t and is updated when moving to t+1.

* Example generated by -dataex-. To install: ssc install dataex
clear
input float(avgrf lravgrf)
234.41667 226.42545
      164  141.4649
        .         .
204.41667 203.14473
  146.625  123.5965
 365.8333 256.55264
      164  141.4649
 365.8333 256.55264
276.16666 237.66338
224.16667 221.04825
    227.5    207.25
        .         .
        .         .
227.58333 174.60965
        .         .
227.58333 174.60965
227.58333 174.60965
 362.9167  334.6009
        .         .
227.58333 174.60965
 394.8333 280.26315
227.58333 174.60965
162.83333 131.41228
227.58333 174.60965
280.04166 246.01315
        .         .
        .         .
        .         .
        .         .
      187 170.17105
   267.25 213.02193
   214.75 184.71053
169.97917 143.19408
214.16667  188.4342
        .         .
        .         .
        .         .
        .         .
   214.75 184.71053
        .         .
276.27777 260.14328
   259.75 225.93333
 281.8611  231.7646
        .         .
   150.75 121.98026
305.08334 277.07455
  243.125  213.8304
174.91667 157.10088
        .         .
        .         .
152.08333 149.89035
200.41667 166.20615
        .         .
226.20833 186.86403
        .         .
  212.125  181.0022
        .         .
        .         .
    217.5 200.97588
        .         .
        .         .
276.16666 237.66338
        .         .
        .         .
   148.25 146.76097
160.41667 153.47807
224.16667 221.04825
281.66666 239.36403
279.91666 247.24342
172.66667 133.78947
        .         .
  179.875  165.4342
201.66667 177.73245
 215.6111 173.46783
   221.75 195.85307
  146.625  123.5965
        .         .
290.34314  247.5467
281.66666 239.36403
        .         .
        .         .
120.77778  97.53655
      296  267.8991
151.08333  149.4035
175.27777 161.20615
227.58333 174.60965
275.16666 243.11075
        .         .
        .         .
227.58333 174.60965
        .         .
201.66667 177.73245
        .         .
        .         .
        .         .
        .         .
189.16667 170.82455
   150.75 121.98026
169.97917 143.19408
227.58333 174.60965
end

[Chen Samulsion]

egen sd_lravgrf=sd(lravgrf)
generate indicator=avgrf>lravgrf+sd_lravgrf
replace indicator=1 if avgrf<lravgrf-sd_lravgrf
label define indicator 1 "One SD Above/Below" 0 "Within SD range"
label values indicator indicator

[Jerome Dolling]

Thank you! This is really helpful!