Ratio Variables in Aggregate Data Analysis: Their Uses, Problems, and Alternatives

Abstract

This article discusses three different uses of ratio variables in aggregate data analysis: (1) as measures of theoretical concepts, (2) as a means to control an extraneous factor, and (3) as a correction for heteroscedasticity. In the use of ratios as indices of concepts, a problem can arise if it is regressed on other indices or variables that contain a common component. For example, the relationship between two per capita measures may be confounded with the common population component in each variable. Regarding the second use of ratios, only under exceptional conditions will ratio variables be a suitable means of controlling an extraneous factor. Finally, the use of ratios to correct for heteroscedasticity is also often misused. Only under special conditions will the common form ofregres sion with ratio variables correct for heteroscedasticity. Alternatives to ratios for each of these cases are discussed and evaluated.

Department

Sociology

Publication Date

5-1979

Journal Title

Sociological Methods and Research

Publisher

Sage Publications

Digital Object Identifier (DOI)

10.1177/004912417900700405

Document Type

Article

Rights

@ 1979 Sage Publications, Inc

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