Dear Stata users,

I am working on the replication of a poverty index based on 34 socieconomic variables, such as internet access (dummy variable) and housing conditions (categorical variable with more than 2 categories) coming from a survey. As the aim of this index is to sum-up a large number of variables into a "common theme" singular variable, the approach would be to run a PCA. However, I read from the other forums that when dealing with categorical variables, it is not recommendable to use the command PCA, but did not find any insights about how to do this when dealing not only with binary but also with ordered multinomial variables. Which would be the right approach, i.e. the right command and procedure, for this specific case?

As a reference (maybe it is somehow helpful to better address my question), the authors that already performed this exercise, built this index based on similar 34 variables obtained from an older/different survey, and performed the 2.0 CATPCA algorithm available in SPSS 23. I would like to rebuild this index with up-to-date information but in Stata and trying to be as close to the method that they used in SPSS.

I am not any Stata expert, so I excuse myself if this question is not appropiate, but I have been looking for an answer to my doubts for a while without any success.

Thank you in advance for your coming insights and further ideas!

Best,
Michelle