I am currently analysing the impact of capital gains tax rate changes on innovation. In order to be able to create a synthetic control based on significant (2% or more) changes in the tax rate, I would like to generate a dummy variable which is 0 for years that have no change or a change by less than 2 in comparison to the year before and a 1 if the tax rate did change by more than 2. for context I have included below a sample of my data where id is a variable identifying the different countries and NetPersonalTax is the Net Personal Capital Gains tax rate. My whole data set spans 1170 observations from 36 countries with 38 years per country.
Code:
* Example generated by -dataex-. To install: ssc install dataex clear input long id int year double NetPersonalTax 1 1981 60 1 1982 60 1 1983 60.41599999999999 1 1984 61 1 1985 61 1 1986 58.225 1 1987 2.450980392156879 1 1988 18.442622950819654 1 1989 16.803278688524586 1 1990 15.163934426229503 1 1991 15.163934426229503 1 1992 15.163934426229503 1 1993 22.985074626865675 1 1994 22.985074626865675 1 1995 19.53125 1 1996 19.84375 1 1997 19.53125 1 1998 19.53125 1 1999 19.53125 1 2000 21.9775 1 2001 26.4065 1 2002 26.4065 1 2003 26.4065 1 2004 26.4065 1 2005 26.4065 1 2006 23.6 1 2007 23.571429 1 2008 23.571429 1 2009 23.571429 1 2010 23.5485 1 2011 23.5485 1 2012 23.5485 1 2013 23.5485 1 2014 27.121 1 2015 27.121 1 2016 27.121 1 2017 24.28 1 2018 24.28 1 2019 24.28 2 1981 62 2 1982 62 2 1983 62 2 1984 62 2 1985 62 2 1986 31 2 1987 31 2 1988 31 2 1989 25 2 1990 25 2 1991 25 2 1992 25 2 1993 25 2 1994 22 2 1995 22 2 1996 25 2 1997 25 2 1998 25 2 1999 25 2 2000 25 2 2001 25 2 2002 25 2 2003 25 2 2004 25 2 2005 25 2 2006 25 2 2007 25 2 2008 25 2 2009 25 2 2010 25 2 2011 25 2 2012 25 2 2013 25 2 2014 25 2 2015 25 2 2016 27.5 2 2017 27.5 2 2018 27.5 2 2019 27.5 3 1981 25.846153846153847 3 1982 20 3 1983 20 3 1984 25 3 1985 25 3 1986 25 3 1987 25 3 1988 25 3 1989 25 3 1990 25 3 1991 25 3 1992 25 3 1993 25 3 1994 13.390000000000002 3 1995 13.390000000000002 3 1996 15 3 1997 15 3 1998 15 3 1999 15 3 2000 15 3 2001 15 3 2002 15 end label values id id label def id 1 "AUS", modify label def id 2 "AUT", modify label def id 3 "BEL", modify
Thank you in advance for your help,
Sincerely
Moritz
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