creating explanatory variables

[bighush]

i have to create a dummy variable named LOSS

it is defined as "LOSS is equal to 1 if net income before extraordinary items is negative for the current and previous years"

so i have the values of the net income with years for different companies i have to just get a simple coding in a cell to help me get the dummy variables.

will be really glad for an assistance

[mcmahobt]

i have to create a dummy variable named LOSS

it is defined as "LOSS is equal to 1 if net income before extraordinary items is negative for the current and previous years"

so i have the values of the net income with years for different companies i have to just get a simple coding in a cell to help me get the dummy variables.

will be really glad for an assistance

bighush,

I'm wondering if you could possibly rephrase your question. I'm not quite sure exactly what you're asking for in terms of a "dummy variable", but I attached an example workbook of what I interpreted. Hopefully it helps.

[bighush]

so i have attached a sample of what i was referring in my earlier description to help me create a dummy variable that takes 1 or 0 for certain
observations

[samba_ravi]

=IF(ROW(1:1)=1,0,IF(AND(A2=OFFSET(A2,-1,0),C2<0,OFFSET(C2,-1,0)<0),1,0))
Try this formula in Cell E2 and copy towards down

[bighush]

thank you all for the suggestions.
they all work well.

[bighush]

hello nflsales, i know this is an excel forum but can you help me get a code in stata for the code you gave me.

[mcmahobt]

bighush,

I believe nflsales' formula would work. A more compact version would also be:

=IF(AND(C3<0,C2<0),1,0)

applied to cell E3, since there is no previous year to Year 1, so the formula would not apply.