CODEWITHSUNDEEP
rfunctionloopspanelinequality
Anthony Howell
Anthony Howell

Reputation: 71

Calculate Concentration Index by Region and Year (panel data)

This is my first post and very stuck on trying to build my first function that calculates Herfindahl measures on Firm gross output, using panel data (year=1998:2007) with firms = obs. by year (1998-2007) and region ("West","Central","East","NE") and am having problems with passing arguments through the function. I think I need to use two loops (one for time and one for region). Any help would be useful.. I really dont want to have to subset my data 400+ times to get herfindahl measures one at a time. Thanks in advance!

Below I provide: 1) My starter code (only returns one value); 2) desired output (2-bins that contain the hefindahl measures by 1) year and by 2) year-region); and 3) original data

1) My starter Code

myherf<- function (x, time, region){
time = year # variable is defined in my data and includes c(1998:2007)
region = region # Variable is defined in my data, c("West", "Central","East","NE")
    for (i in 1:length(time)) {
      for (j in 1:length(region)) {
        herf[i,j] <- x/sum(x)
        herf[i,j] <- herf[i,j]^2
        herf[i,j] <- sum(herf[i,j])^1/2        
      }
    }
  return(herf[i,j])
}

myherf(extractiveoutput$x, i, j)
Error in herf[i, j] <- x/sum(x) : object 'herf' not found

2) My desired outcome is the following two vectors: 

A. (1x10 vector)              
Year  herfindahl(yr)  
1998    x                        
1999    x                       
...                             
2007    x                       

B. (1x40 vector)  
Year  Region   hefindahl(yr-region)  
1998  West      x                                     
1998  Central   x                                    
1998  East      x    
1998  NE        x    
...  
2007  West      x    
2007  Central   x  
2007  East      x   
2007  northeast x

3) Original Data 

Obs. industry year  region    grossoutput  
1         06 1998    Central 0.048804830  
2         07 1998    Central 0.011222478  
3         08 1998    Central 0.002851575  
4         09 1998    Central 0.009515881  
5         10 1998    Central 0.0067931  
...  

12        06 1999    Central 0.050861447  
13        07 1999    Central 0.008421093  
14        08 1999    Central 0.002034649  
15        09 1999    Central 0.010651283  
16        10 1999    Central 0.007766118  
...  
111       06 1998       East 0.036787413  
112       07 1998       East 0.054958377  
113       08 1998       East 0.007390260  
114       09 1998       East 0.010766598  
115       10 1998       East 0.015843418  
...  
436       31 2007       West 0.166044176  
437       32 2007       West 0.400031011  
438       33 2007       West 0.133472059  
439       34 2007       West 0.043669662  
440       45 2007       West 0.017904620

Upvotes: 1

Views: 1143

Answers (1)

rafa.pereira
rafa.pereira

Reputation: 13817

You can use the conc function from the ineq library. The solution gets really simple and fast using data.table.

library(ineq)
library(data.table)

# convert your data.frame into a data.table
  setDT(df)

# calculate inequality of grossoutput by region and year
  df[, .(inequality = conc(grossoutput, type = "Herfindahl")), by=.(region, year) ]

Upvotes: 1

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