{smcl} {* *! version 1.0.0 June 28, 2020} {title:Title} {p 4 4 2} {cmdab:grvar} {hline 1} Applies a non-constant growth rate to a variable {marker syntax}{...} {title:Syntax} {p 4 4 2} {cmdab:grvar} growthvar var{cmd:,} {it:generate(name)} [{it:option}] {synoptset 20 tabbed}{...} {synopthdr} {synoptline} {syntab:Main} {synopt:{cmdab:gen:erate(}name{cmd:)}} Specifies the name of the new variable. This is required. {p_end} {synopt:{opt replace}} Specifies if you want to replace the variable; default is not replace. {p_end} {pstd} {p_end} {synoptline} {p2colreset}{...} {p 4 6 2} {marker description}{...} {title:Description} {pstd} {pstd} {cmd:grvar} Calculate the future values of a variable from the initial value and a non-constant growth/decrease rate (e.g. inflation). It is useful when we want to fit a variable with a growth rate in a time serie or panel data. {pstd} Creating a new variable using a growth rate is very simple to code, we just have to follow a specification like: x_t = x_0*(1+r)^t. But if the growth rate is not constant, we cannot use that specification, the solution is represented in the following table: {txt} {c TLC}{hline 50}{c TRC} {c |}{res} time growthvar var output{txt} {c |} {c LT}{hline 50}{c RT} {c |} 1 . x x{txt} {c |} {c |} 2 r1 . x*(1+r1){txt} {c |} {c |} 3 r2 . x*(1+r1)*(1+r2){txt} {c |} {c |} 4 r3 . x*(1+r1)*(1+r2)*(1+r3){txt} {c |} {c BLC}{hline 50}{c BRC} This is exactly what the command {cmdab:grvar} does in a time serie or panel data. {marker examples}{...} {title:Examples} {pstd} {pstd} We import panel data and define panel and time variable {pstd} .{stata webuse invest2.dta, clear} {pstd} .{stata xtset company time} {pstd} Now, we create a growth rate and a new investment variable; we only keep the first investment value. {pstd} .{stata gen GrowthInvest = (invest-L.invest)/L.invest} {pstd} .{stata gen Invest = invest if time==1} {pstd} Finally, just using the first value and the growth rate of the investment, we calculate the values for all periods. {pstd} .{stata grvar GrowthInvest Invest, gen(invest2)} {title:Author} {p} Daniel PailaĆ±ir Email {browse "mailto:daniel.pailanir@gmail.com":daniel.pailanir@gmail.com}