help ceqstatsig (beta version; please report bugs) Sean Higgins

Title

ceqstatsig -- Statistical significance tests of the change in inequality and poverty between income concepts for sheet "E7. Statistical Significance" of the CEQ Master Workbook 2016

Syntax

ceqstatsig [if] [in] [weight] [using filename] [, options]

Income concepts
market(varname) Market income

mpluspensions(varname) Market income plus pensions

netmarket(varname) Net market income

gross(varname) Gross income

taxable(varname) Taxable income

disposable(varname) Disposable income

consumable(varname) Consumable income

final(varname) Final income

PPP conversion
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

cpibase(real) CPI of base year (i.e., year of PPP, usually 2005 or 2011)

cpisurvey(real) CPI of year of household survey

daily Indicates that variables are in daily currency

monthly Indicates that variables are in monthly currency

yearly Indicates that variables are in yearly currency (the default)

Survey information
hsize(varname) Number of members in the household
(should be used when each observation in the data set is a household)

hhid(varname) Unique household identifier variable
(should be used when each observation in the data set is an individual)

psu(varname) Primary sampling unit; can also be set using svyset

strata(varname) Strata (used with complex sampling desings); can also be set using svyset

Poverty lines
pl1(real) Lowest poverty line in $ PPP (default is $1.25)

pl2(real) Second lowest poverty line in $ PPP (default is $2.50)

pl3(real) Third lowest poverty line in $ PPP (default is $4)

nationalextremepl(string) National extreme poverty line in same units as income variables (can be a scalar or varname)

nationalmoderatepl(string) National moderate poverty line in same units as income variables (can be a scalar or varname)

proportion(real) Relative poverty line as a proportion of median household income from 0 to 1 (default is 0.5)

Ignore missing values
ignoremissing Ignore any missing values of income concepts and fiscal interventions

Export directly to CEQ Master Workbook (requires Stata 13 or newer)
country(string) Country

surveyyear(string) Year of survey

authors(string) Authors of study

baseyear(real) Base year of PPP conversion (e.g., 2005, 2011)

scenario(string) Scenario

group(string) Group

project(string) Project

sheet(string) Name of sheet to write population matrices. Default is "E7. Statistical Significance"

open Automatically open CEQ Master Workbook with new results added

pweight allowed; see weights. Alternatively, weights can be specified using svyset.

Description

ceqstatsig tests the statistical significance of the change in inequality or poverty between core income concepts. It uses modified versions of the routines from Araar and Duclos's (2013) Distributive Analysis Data Package to compute p-values for a test of the null hypothesis that the difference between inequality or poverty estimates for two income concepts is zero. (Specifically, it uses modified versions of the commands digini, dientropy, dinineq, and difgt.) The included measures are the Gini, absolute Gini, Theil, 90/10, poverty headcount ratio at various poverty lines, poverty gap ratio at various poverty lines, squared poverty gap (also known as poverty severity) at various poverty lines, and the concentration coefficients of income concepts with respect to each of the eight core income concepts. It produces matrices of the difference in point estimates as well as the p-values from the above statistical test.

The CEQ core income concepts include market income, market income plus pensions, net
market income, gross income, taxable income, disposable income, consumable income, and final
income. The variables for these income concepts, which should be expressed in local currency
units (preferably per year for ease of comparison with totals from national accounts), are
indicated using the market(varname), mpluspensions(varname),
netmarket(varname), gross(varname), taxable(varname),
disposable(varname), consumable(varname), consumable(varname),
and final(varname) options.

Poverty lines in PPP dollars per day can be set using the pl1(real), pl2(real),
and 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 pl1(1.90). Poverty lines in local currency can be entered using
the nationalextremepl(string) and nationalmoderatepl(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 proportion(real), where 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 proportion(0.6).

ceqstatsig automatically converts local currency variables to PPP dollars, using the PPP conversion
factor given by ppp(real), the consumer price index (CPI) of the year of PPP (e.g., 2005 or
2011) given by cpibase(real), and the CPI of the year of the household
survey used in the analysis given by cpisurvey(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 (daily), per month (monthly), or per year
(yearly, the default assumption).

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 hhid(varname) option; the
hsize(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 hsize(varname); the
hhid(varname) option should not be specified. In either case, the weight used should be
the household sampling weight and should 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.

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 svyset. Information about complex stratified sample designs can also be entered
using svyset since ceqstatsig automatically uses the information specified using
svyset. Alternatively, the primary sampling unit can be entered using the psu(varname)
option and strata can be entered using the strata(varname) option.

By default, ceqstatsig does not allow income concept or fiscal intervention variables to have missing
values: if a household has 0 income for an income concept, receives 0 from a transfer or a subsidy,
or pays 0 of a tax, 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
ignoremissing 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.

Negative incomes are allowed, but a warning is issued for each core income concept that
has negative values (or positive values when a fiscal intervention is stored as negative values). This is because
various measures are no longer well-behaved when negative values are included (for example, the Gini coefficient,
concentration coefficient, or squared poverty gap can exceed 1, and other desirable properties of these measures
when incomes are non-negative no longer hold when negative values are allowed).

Results are automatically exported to the CEQ Master Workbook Output Tables if
using filename is specifed in the command, where filename is the Master
Workbook. By default, ceqstatsig prints to a sheet titled "E7. Statistical Significance";
the user can override the sheet name using the sheet(string) option. Exporting directly to
the Master Workbook requires Stata 13 or newer. The Master Workbook populated with results from
ceqstatsig can be automatically opened if the open option is specified (in this
case, filename cannot have spaces).

Examples

Locals for PPP conversion (obtained from WDI through the wbopendata command)

. local ppp = 1.5713184 // 2005 Brazilian reais per 2005 $ PPP

. local cpi = 95.203354 // CPI for Brazil for 2009

. local cpi05 = 79.560051 // CPI for Brazil for 2005

Local currency poverty lines

. local pl70 = 70*12 // 70 reais/month to yearly

. local pl140 = 140*12 // 140 reais/month to yearly

Individual-level data (each observation is an individual)

. ceqstatsig [pw=w] using C:/Output_Tables.xlsx, hhid(hh_code) psu(psu_var) strata(stra_var) m(ym) mplusp(ymplusp) n(yn) g(yg) t(yt) d(yd) c(yc) f(yf) ppp(`ppp') cpibase(`cpi05') cpisurvey(`cpi') nationale(PLipea_ext) nationalm(PLipea) open

Household-level data (each observation is a household)

. ceqstatsig [pw=w] using C:/Output_Tables.xlsx, hsize(members) psu(psu_var) strata(stra_var) m(ym) mp(ymplusp) n(yn) g(yg) t(yt) d(yd) c(yc) f(yf) ppp(`ppp') cpibase(`cpi05') cpisurvey(`cpi') nationale(PLipea_ext) nationalm(PLipea) open

Saved results

Pending

Author

Sean Higgins, CEQ Institute, sean.higgins@ceqinstitute.org

References

Commitment to Equity (CEQ) website.

Araar, A. and J.-Y. Duclos. 2013. "Distributive Analysis Stata Package"

Lustig, N. and S. Higgins. 2013. "Commitment to Equity Assessment (CEQ): Estimating the
Incidence of Social Spending, Subsidies and Taxes Handbook." CEQ Working Paper 1.