# Creating a dependent variable

#### a.petrov89

##### New Member
Hi everyone,

I'm a newbie (forum and statistics) and need some help.

In concerns my master thesis paper and more specifically the dependent variable I would like to use. The paper is on "Culture and Risk Tolerance" and analyses variations in risk attitudes between different cultures - Western European, Eastern European and Eas-Asian. The dependent is "risk tolerance" and I want to build it using data from 5 Likert Scale + 1 interval risk attitude questions (see last two pages of attachment). My problem is no matter what I do I can't compute it properly. Here is the last thing I tried:

So, I have 6 questions related to risk attitude (5 in the form of Likert scales and 1 interval. I'm purposely leaving the last survey questions out of this) --> 100/6 = 16.66% or each of these 6 questions accounts for .166666 towards the dependent variable. However, I assign the weights the following way: 18% for Likert scale question and just 10% on the interval (5 x 18 + 10 = 100). This is because the interval question is a self-assessment; hence people may overestimate their subjective risk tolerance attitude. Nevertheless, the actual weights should not really matter.
Likert scale questions vary from strongly agree to strongly disagree and have 5 possible answers; hence each answer represents a 1/5 of the actual question. Despite of this, each answer reveals different attitude towards risk and points range from 1 to 5 -->The higher the score, the higher the risk tolerance. For example, if a person chooses ''agree'' to ''I like to gamble'', then this amounts to 4 points. I calculate the total points this question represents as follows: 1/5 x 4 x 18 = 0.144. Same process is repeated for the other 4 Likert scale questions.

Then, the interval question is calculated in a similar way. The self-assessment ranges from 0 to 10 and every answer counts for 1/10 of the total. If a person ticks 7 then: 1/10 x 7 x 0.10 = 0.07

The risk index (dependent) is finally calculated as the sum of all 6 questions. If I have 5 ''agree'' (4 points each) and a 7 on the self-evaluation then the risk index will equal = 5 x 0.144 + 0.07 = 0.79 or 79%.

As I mentioned I'm a complete newbie and although I enjoy playing around with SPSS I have no idea whether the above makes any sense.

I would appreciate some feedback or suggestions on the matter.

Thanks,

A. Petrov