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Estimating reliability coefficients with heterogeneous item weightings using Stata: A factor based approach

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  • M.A. Boermans
  • M.A.C. Kattenberg

Abstract

We show how to estimate a Cronbach's alpha reliability coefficient in Stata after running a principal component or factor analysis. Alpha evaluates to what extent items measure the same underlying content when the items are combined into a scale or used for latent variable. Stata allows for testing the reliability coefficient (alpha) of a scale only when all items receive homogenous weights. We present a user-written program that computes reliability coefficients when implementation of principal component or factor analysis shows heterogeneous item loadings. We use data on management practices from Bloom and Van Reenen (2010) to explain how to implement and interpret the adjusted internal consistency measure using afa.

Suggested Citation

  • M.A. Boermans & M.A.C. Kattenberg, 2011. "Estimating reliability coefficients with heterogeneous item weightings using Stata: A factor based approach," Working Papers 11-19, Utrecht School of Economics.
  • Handle: RePEc:use:tkiwps:1119
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    File URL: https://dspace.library.uu.nl/bitstream/handle/1874/218749/WP11-19_3.pdf
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    References listed on IDEAS

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    1. Stephen J. Turnovsky, 1976. "Optimal Stabilization Policies for Stochastic Linear Systems: The Case of Correlated Multiplicative and Additive Disturbances," Review of Economic Studies, Oxford University Press, vol. 43(1), pages 191-194.
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    3. Beck, Gunter W. & Wieland, Volker, 2002. "Learning and control in a changing economic environment," Journal of Economic Dynamics and Control, Elsevier, vol. 26(9-10), pages 1359-1377, August.
    4. Chow, Gregory C, 1975. "A Solution to Optimal Control of Linear Systems with Unknown Parameters," The Review of Economics and Statistics, MIT Press, vol. 57(3), pages 338-345, August.
    5. MacRae, Elizabeth Chase, 1975. "An Adaptive Learning Rule for Multiperiod Decision Problems," Econometrica, Econometric Society, vol. 43(5-6), pages 893-906, Sept.-Nov.
    6. Elizabeth Chase MacRae, 1972. "Linear Decision with Experimentation," NBER Chapters,in: Annals of Economic and Social Measurement, Volume 1, number 4, pages 437-447 National Bureau of Economic Research, Inc.
    7. Tucci, Marco P., 1997. "Adaptive control in the presence of time-varying parameters," Journal of Economic Dynamics and Control, Elsevier, vol. 22(1), pages 39-47, November.
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    Cited by:

    1. Martijn Boermans & Daan Willebrands, 2012. "Financial constraints, risk taking and firm performance: Recent evidence from microfinance clients in Tanzania," DNB Working Papers 358, Netherlands Central Bank, Research Department.

    More about this item

    Keywords

    afa; factor analysis; Cronbach's alpha; reliability; heterogeneous scale construction; latent variable;

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