Creating a 2000 IES-LFS Database in Stata



PROVIDE Project Technical Paper 2005:1
upwards pro-rata. At the same time incother is also netted out so that the components
now only include
inclab (which is inclusive of inchphc), incgos, inccorp, incgov,
rowtransinc and hhtransinc.

February 2005


for var inclab incgos inccorp incgov rowtransinc hhtransinc:
replace X = X + (incother*X/totincadj) if totincadj > 0

Some households report zero income but positive expenditure. In these cases
incother is positive but and totincadj = totinc - incother is zero, and no information
exists about the pattern of income of the household. For this reason the above Stata
command contains an
if-statement that prevents division by zero. For these households
the average income pattern across all households is used to estimate the ‘missing’
income components.

A similar approach was followed for the expenditure side. Under-declared
expenditure (
expundecl) was added to hhother, and the net increase added to totexp.
The components of
totexp, namely C1 (including hhhphc) to C96, hhtransexp,
rowtransexp, hhinctax, hhlocaltax and hhsav are scaled upward using the Stata
command below. For those households reporting zero
totexpadj the expenditure
components were estimated as before using the average expenditure pattern across all
households.

for var C1 - C96 hhtransexp rowtransexp hhinctax hhlocaltax hhsav :
replace X = X + (X/totexpadj)*(hhother) if totexpadj > 0 ;

This do-file also makes a final adjustment to domestic transfers (variables
hhtransinc and hhtransexp) to ensure their weighted averages are equal in the final
database. Finally, some checks are performed to make sure that all adjustments were
done correctly, i.e. that the income and expenditure components add up to total income
and expenditure respectively.

4.2.4. Scaling up the person-level factor income variables (inclabpscaling.do)

Due to the adjustments made in fixing.do the person-level inclabp_new variables of a
household do not necessarily add up to the new household-level
inclab variable any
longer. Changes to
inclab originate from three sources. Firstly, income from the sale of
home produced agricultural products is now included under
inclab since the current
SAM does not separate out this type of income. Secondly,
inclab was scaled up in cases
where total income was less than total expenditure so that total income and expenditure
matches. Thirdly, in some cases where total income was zero and total expenditure
greater than zero, it was assumed that the true households income is equal to total
expenditure. The components of total income were ‘built up’ on the assumption that the
household’s structure of income was the same as that of the ‘average’ household. Under

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