{smcl} {* 25sep2016}{...} {cmd:help ceqassump} (beta version; please report bugs) {right:Sean Higgins} {hline} {title:Title} {p 4 11 2} {hi:ceqassump} {hline 2} Test how assumptions used to construct income concepts affect inequality, poverty, distribution {title:Syntax} {p 8 11 2} {cmd:ceqassump} {varlist} {ifin} {weight} [{cmd:using} {it:filename}] [{cmd:,} {it:options}]{break} {synoptset 29 tabbed}{...} {synopthdr} {synoptline} {syntab:PPP conversion} {synopt :{opth ppp(real)}}PPP conversion factor (LCU per international $, consumption-based) from year of PPP (e.g., 2005 or 2011) to year of PPP; do not use PPP factor for year of household survey{p_end} {synopt :{opth cpib:ase(real)}}CPI of base year (i.e., year of PPP, usually 2005 or 2011){p_end} {synopt :{opth cpis:urvey(real)}}CPI of year of household survey{p_end} {synopt :{opt da:ily}}Indicates that variables are in daily currency{p_end} {synopt :{opt mo:nthly}}Indicates that variables are in monthly currency{p_end} {synopt :{opt year:ly}}Indicates that variables are in yearly currency (the default){p_end} {syntab:Survey information} {synopt :{opth hs:ize(varname)}}Number of members in the household (should be used when each observation in the data set is a household){p_end} {synopt :{opth hh:id(varname)}}Unique household identifier variable (should be used when each observation in the data set is an individual){p_end} {synopt :{opth psu(varname)}}Primary sampling unit; can also be set using {help svyset:svyset}{p_end} {synopt :{opth s:trata(varname)}}Strata (used with complex sampling desings); can also be set using {help svyet:svyset}{p_end} {syntab:Poverty lines} {synopt :{opth pl1(real)}}Lowest poverty line in $ PPP (default is $1.25){p_end} {synopt :{opth pl2(real)}}Second lowest poverty line in $ PPP (default is $2.50){p_end} {synopt :{opth pl3(real)}}Third lowest poverty line in $ PPP (default is $4){p_end} {synopt :{opth nationale:xtremepl(string)}}National extreme poverty line in same units as income variables (can be a scalar or {varname}){p_end} {synopt :{opth nationalm:oderatepl(string)}}National moderate poverty line in same units as income variables (can be a scalar or {varname}){p_end} {synopt :{opth othere:xtremepl(string)}}Other extreme poverty line in same units as income variables (can be a scalar or {varname}){p_end} {synopt :{opth otherm:oderatepl(string)}}Other moderate poverty line in same units as income variables (can be a scalar or {varname}){p_end} {synopt :{opth prop:ortion(real)}}Relative poverty line as a proportion of median household income from 0 to 1 (default is 0.5){p_end} {syntab:Income group cut-offs} {synopt :{opth cut1(real)}}Upper bound income for ultra-poor; default is $1.25 PPP per day{p_end} {synopt :{opth cut2(real)}}Upper bound income for extreme poor; default is $2.50 PPP per day{p_end} {synopt :{opth cut3(real)}}Upper bound income for moderate poor; default is $4 PPP per day{p_end} {synopt :{opth cut4(real)}}Upper bound income for vulnerable; default is $10 PPP per day{p_end} {synopt :{opth cut5(real)}}Upper bound income for middle class; default is $50 PPP per day{p_end} {syntab:Produce subset of results} {synopt :{opt nod:ecile}}Do not produce results by decile{p_end} {synopt :{opt nog:roup}}Do not produce results by income group{p_end} {syntab:Ignore missing values} {synopt :{opt ignorem:issing}}Ignore any missing values in the variables in {varlist}{p_end} {syntab:Export directly to CEQ Master Workbook (requires Stata 13 or newer)} {synopt :{opth coun:try(string)}}Country{p_end} {synopt :{opth surv:eyyear(string)}}Year of survey{p_end} {synopt :{opth auth:ors(string)}}Authors of study{p_end} {synopt :{opth base:year(real)}}Base year of PPP conversion (e.g., 2005, 2011){p_end} {synopt :{opth scen:ario(string)}}Scenario{p_end} {synopt :{opth grou:p(string)}}Group{p_end} {synopt :{opth proj:ect(string)}}Project{p_end} {synopt :{opth sheet(string)}}Name of sheet to write results. Default is "E28. Assumption Testing"{p_end} {synopt :{opt open}}Automatically open CEQ Master Workbook with new results added{p_end} {synoptline} {p 4 6 2} {cmd:pweight} allowed; see {help weights}. Alternatively, weights can be specified using {help svyset}. {title:Required commands} {pstd} {cmd:ceqassump} requires installation of {cmd:quantiles} (Osorio, 2007) and {cmd:sgini} (Van Kerm, 2009). To install, {stata ssc install quantiles:ssc install quantiles} and {stata "net install sgini, from(http://medim.ceps.lu/stata)"}. {title:Description} {pstd} {cmd:ceqassump} is designed to be used to test at a glance how different assumptions used to construct income concepts affect the main inequality, poverty, and distribution indicators used in a CEQ Assessment. Rather than provide income concept options for the core income concepts as in the other CEQ Stata Package commands, the user provides income concept variables, which may or may not be CEQ core income concepts, in {varlist}. {pstd} For example, suppose the user wants to test the impact of including vs. excluding own production from the market income measure; the user would create two versions of market income (at the household per capita or per adult equivalent level) and provide the variables for these two versions of market income in {varlist}. {pstd} As another example, suppose the user wants to test the impact of tax exemptions. Since income in the survey already includes the benefits of tax exemptions, these cannot be added in the same way as other benefits. Instead, the user could compare "consumable income minus tax exemptions" (i.e., income that would have existed in the absence of tax exemptions) with consumable income to see the marginal contribution of tax exemptions to inequality. Again, these two variables would be supplied to the command in {varlist}. {pstd} The data set can be either at the household or individual level, but if it is at the individual level make sure that for each individual the variables are equal for all members of the household. (For example, for age of household head, define a variable "age of household head" that equals the age of the head for all members in that head's household; using a variable "age" in an individual-level data set would not be correct for the household-level sociodemographic characteristics.) {pstd} If the data set is at the individual level (each observation is an individual), the variable with the identification code of each household (i.e., it takes the same value for all members within a household) should be specified in the {opth hh:id(varname)} option; the {opth hs:ize(varname)} option should not be specified. If the data set is at the household level, the number of members in the household should be specified in {opth hs:ize(varname)}; the {opth hh:id(varname)} option should not be specified. In either case, the weight used should be the household sampling weight and should {it:not} be multiplied by the number of members in the household since the program will do this multiplication automatically in the case of household-level data. {pstd} Poverty lines in PPP dollars per day can be set using the {opth pl1(real)}, {opth pl2(real)}, and {opth pl3(real)} options; the defaults for these are the commonly-used $1.25, $2.50, and $4 PPP poverty lines. For example, to change the lowest poverty line from $1.25 PPP per day to $1.90 PPP per day, specify {cmd:pl1(1.90)}. Poverty lines in local currency can be entered using the {opth nationale:xtremepl(string)}, {opth nationalm:oderatepl(string)}, {opth othere:xtremepl(string)}, {opth otherm:oderatepl(string)} options. Local currency poverty lines can be entered as real numbers (for poverty lines that are fixed for the entire population) or variable names (for poverty lines that vary, for example across space), and should be in the same units as the income concept variables (preferably local currency units per year). The relative poverty line can be specfied as a proportion of median household income using {opth proportion(real)}, where {it:real} should be a proportion between 0 and 1. The default proportion is 0.5, i.e. 50% of household median income. For example, to change the relative poverty line from 50% to 60% of median income (which is used by the OECD), specify {cmd:proportion(0.6)}. {pstd} For results by income group, the cut-offs of these groups can be changed using the {opth cut1(real)} to {opth cut5(real)} options; the default groups are ultra-poor (less than $1.25 per day in purchasing power parity [PPP] adjusted US dollars), extreme poor ($1.25 to $2.50 PPP per day), moderate poor ($2.50 to $4 PPP per day), vulnerable ($4 to $10 PPP per day), middle class ($10 to $50 PPP per day) and wealthy ($50 and more PPP per day). For example, specify {cmd:cut1(1.90)} to change the first cut-off to $1.90 PPP per day (which would cause the lowest group to become less than $1.90 PPP per day, and the second group--if {opth cut2(real)} is not specified so the default second cut-off is maintained--to range from $1.90 to $2.50 PPP). {pstd} {cmd: ceqassump} automatically converts local currency variables to PPP dollars, using the PPP conversion factor given by {opth ppp(real)}, the consumer price index (CPI) of the year of PPP (e.g., 2005 or 2011) given by {opth cpib:ase(real)}, and the CPI of the year of the household survey used in the analysis given by {opth cpis:urvey(real)}. The year of PPP, also called base year, refers to the year of the International Comparison Program (ICP) that is being used, e.g. 2005 or 2011. The survey year refers to the year of the household survey used in the analysis. If the year of PPP is 2005, the PPP conversion factor should be the "2005 PPP conversion factor, private consumption (LCU per international $)" indicator from the World Bank's World Development Indicators (WDI). If the year of PPP is 2011, use the "PPP conversion factor, private consumption (LCU per international $)" indicator from WDI. The PPP conversion factor should convert from year of PPP to year of PPP. In other words, when extracting the PPP conversion factor, it is possible to select any year; DO NOT select the year of the survey, but rather the year that the ICP was conducted to compute PPP conversion factors (e.g., 2005 or 2011). The base year (i.e., year of PPP) CPI, which can also be obtained from WDI, should match the base year chosen for the PPP conversion factor. The survey year CPI should match the year of the household survey. Finally, for the PPP conversion, the user can specify whether the original variables are in local currency units per day ({opt da:ily}), per month ({opt mo:nthly}), or per year ({opt year:ly}, the default assumption). {pstd} There are two options for including information about weights and survey sample design for accurate estimates and statistical inference. The sampling weight can be entered using {weight} or {help svyset}. Information about complex stratified sample designs can also be entered using {help svyset} since {cmd:ceqassump} automatically uses the information specified using {help svyset}. Alternatively, the primary sampling unit can be entered using the {opth psu(varname)} option and strata can be entered using the {opth s:trata(varname)} option. {pstd} By default, {cmd: ceqassump} does not allow income concept variables to have missing values: if a household has 0 income for an income concept, the household should have 0 rather than a missing value. If one of these variables has missing values, the command will produce an error. For flexibility, however, the command includes an {opt ignorem:issing} option that will drop observations with missing values for any of these variables, thus allowing the command to run even if there are missing values. {pstd} Results are automatically exported to the CEQ Master Workbook if {cmd:using} {it:filename} is specifed in the command, where {it:filename} is the Master Workbook. By default, {cmd:ceqassump} prints to the sheet titled "E28. Assumption Testing". Exporting directly to the Master Workbook requires Stata 13 or newer. The Master Workbook populated with results from {cmd:ceqassump} can be automatically opened if the {opt open} option is specified (in this case, {it:filename} cannot have spaces). Results are also saved in matrices available from {cmd:return list}. To produce only a portion of the results, specify only a subset of the income concept options or use {opt nod:ecile} or {opt nog:roup}. {title:Examples} {pstd}Locals for PPP conversion (obtained from WDI through the {cmd: wbopendata} command){p_end} {phang} {cmd:. local ppp = 1.5713184 // 2005 Brazilian reais per 2005 $ PPP}{p_end} {phang} {cmd:. local cpi = 95.203354 // CPI for Brazil for 2009}{p_end} {phang} {cmd:. local cpi05 = 79.560051 // CPI for Brazil for 2005}{p_end} {pstd}Local currency poverty lines{p_end} {phang} {cmd:. local pl70 = 70*12 // 70 reais/month to yearly}{p_end} {phang} {cmd:. local pl140 = 140*12 // 140 reais/month to yearly}{p_end} {pstd}Comparing market with and without own production (individual-level data){p_end} {phang} {cmd:. ceqassump ym ym_no_ownprod [pw=w] using C:/MWB2016_E28.xlsx, hhid(hh_code) psu(psu_var) strata(stra_var) pens(pensions) ppp(`ppp') cpibase(`cpi05') cpisurvey(`cpi') prop(0.6) nationale(PLipea_ext) nationalm(PLipea) othere(`pl70') otherm(`pl140') open}{p_end} {pstd}Comparing market with and without own production (household-level data){p_end} {phang} {cmd:. ceqassump ym ym_no_ownprod [pw=w] using C:/MWB2016_E28.xlsx, hsize(members) psu(psu_var) strata(stra_var) ppp(`ppp') cpibase(`cpi05') cpisurvey(`cpi') prop(0.6) nationale(PLipea_ext) nationalm(PLipea) othere(`pl70') otherm(`pl140') open}{p_end} {pstd}Effect of tax exemptions (individual-level data){p_end} {phang} {cmd:. ceqassump yc_minus_taxexemptions yc [pw=w] using C:/MWB2016_E28.xlsx, hhid(hh_code) psu(psu_var) strata(stra_var) pens(pensions) ppp(`ppp') cpibase(`cpi05') cpisurvey(`cpi') prop(0.6) nationale(PLipea_ext) nationalm(PLipea) othere(`pl70') otherm(`pl140') open}{p_end} {pstd}Effect of tax exemptions (household-level data){p_end} {phang} {cmd:. ceqassump yc_minus_taxexemptions yc [pw=w] using C:/MWB2016_E28.xlsx, hsize(members) psu(psu_var) strata(stra_var) ppp(`ppp') cpibase(`cpi05') cpisurvey(`cpi') prop(0.6) nationale(PLipea_ext) nationalm(PLipea) othere(`pl70') otherm(`pl140') open}{p_end} {title:Saved results} Pending {title:Author} {p 4 4 2}Sean Higgins, CEQ Institute, sean.higgins@ceqinstitute.org {title:References} {pstd}Commitment to Equity (CEQ) {browse "http://www.commitmentoequity.org":website}.{p_end} {phang} Osorio, R. 2007. "{bf:quantiles}: Stata module to categorize by quantiles." Boston College Department of Economics Statistical Software Components S456856.{p_end}