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Introduction

Overview of the module

Materials and Reading

Introduction to Stata

What is applied economics?

In the history of economics different authors have had different viewswhat applied economics might mean.

In modern mainstream economics, there is a shared understanding thatthere is a body of abstract core economic theory, and that applyingeconomics involved reducing the level of abstraction in order toilluminate specific problems or questions (R. Backhouse and J. Biddle,2000).

This can take the form of

Applying economic theory to a finer level of detail (e .g. the tradeof CO2 emission certificates, or the sale of mobile phone networkfrequencies);

Eva Poen BEE3055 - Topic 1 3

Introduction




What is applied economics? (cont.)

Imposing a structure on the general theory to draw specific

conclusions from the theory;

Using empirical methods to test certain aspects of economictheory (e. g. parameters of the theory, or even assumptions behindthe theory).

As a result of this the economic discipline has split into fields such aslabour economics, monetary economics, public economics, gametheory, financial economics, development economics, environmental

economics, health economics, agricultural economics etc.

We will focus on empiricalapplied economics, rather thantheoreticalapplied economics.


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Introduction




Aim of the module

Why Stata?

Format of the course

The Project

Course outline for term 1 (approx.)

Target audience and aims of the module

This course addresses students who are familiar with

intermediate statistics and econometrics on a theoretical level,

and who want to learn how to conduct applied empirical

economic analysis.

Applications will include topics from: labour economics; menu

costs and the economics of food pricing; behavioural and

experimental economics (including experimental macro).

The course aims at introducing students to the use of

professional statistics software. Four areas of skills will be

addressed:


Introduction




Aim of the moduleWhy Stata?


The Project


Aims of the module

Research skills How to conduct an empirical research project

from start to finish.

Good practice of data analysis Learn how to conduct a

well-structured and reproducible analysis, how to

avoid mistakes, and how to organize your work such

that you can still understand it 6 months later.

Data skills Learn how to visualize important properties of your

data, generate summary statistics, uncover

mistakes in your data, and manipulate, import andexport data as well as results.


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Introduction




Aim of the module

Why Stata?


The Project


Aims of the module (continued)

Applied econometrics Lessons are planned on linear regression,models for limited dependent variables, panel data

methods and time series data.

Technical skills Learn how to exploit the power of professional

statistics software, including basic programming.

Additional quantitative techniques to be covered:

Exploratory data analysis.Regression diagnostics.

Missing values: implications and remedies.

Simulation methods.


Introduction






The Project


Software skills

Data analysis skills:

Importing data into the software and organizing your work.

Data types, display formats and precision.

Working with dates and times / high frequency data.

Advanced data manipulation.

Graphics.

Working with loops/other ways of repeating commands.

Exporting data, results, graphs and tables to other software.

Stata programming (writing procedures for Stata).

... Eva Poen BEE3055 - Topic 1 8

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Introduction




Aim of the module

Why Stata?


The Project


Reasons not to use Stata

Command line driven. Not point-and-click oriented and

therefore harder to learn (although there are menus

available).

You have used TSM in the past, and might be required to

learn some other software in the future.

My friend says that her favourite procedure xyzis not

implemented in Stata.

Stata is expensive (although we have a site license here).


Introduction






The Project


Reasons to use Stata

Command line driven. Not point-and-click oriented.

Very intuitive and consistent syntax.

Excellent and well-documented software.

Good customer support and active user community.

Good balance between user-friendliness and

programmability.

I like Stata (and so do a lot of other people).


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Introduction




Aim of the module

Why Stata?


The Project


Lectures and assessment

Lectures dates: every Wednesday from 09:00 to 11:00 (term

1).

Tutorials are held fortnightly, Fridays from 15:00 to 16:00.

Practical exercises will feature in lectures and tutorials.

40 % of your marks will come from a practical exam, to be

held in early December.

60 % of your marks will come from a project (individual,

independent piece of work), to be completed by May 2013.


Introduction






The Project


How the project works

Its all yours! The project is an independent piece of research.

You decide which topic you want to work on, and

how you want to do it.

You will be given guidance not only regarding empirical analysis

but also regarding choice of topic, research

proposal, literature search, data sources etc.

Your preparation takes place in term 1 when you will learn new

skills and see examples of research.

The project is split into the proposal stage and the research

stage. Both will be marked separately.

The time frame in which to complete your project is the second

term, up until the summer examinations period.


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Introduction




Aim of the module

Why Stata?


The Project


Previous examples

Well-being and the Comparison Income Effect (Economics of

Happiness)

Demographics and democracy: long term trends and their

implications (voting behaviour)

CO2 emissions and economic growth

Does affinity increase the commitment towards a cause?


Introduction






The Project


Which topics will be covered

Exploratory data analysis Summary statistics, graphics,

distributional graphs, Kernel density estimation etc.Linear regression Multiple regression (cross-sectional data),

outliers, regression diagnostics.

Missing data and what to do about it. Also: local macros.

Binary dependent variables Modelling binary outcomes,

estimation, interpretation, marginal effects etc.

Panel data Description and manipulation, linear panel models,

time operators.Simulation methods Monte-Carlo simulations. Law of large

numbers and central limit theorem at work.


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Introduction




Reading

Stata Resources

ELE

What to read

Reading will be announced for every topic. However, muchattention will be paid to practical skills.

The two main textbooks that we will use are

Microeconometrics Using Stataby Cameron and Trivedi, and

Using Stata for Principles of Econometricsby Adkins and

Hill.

All relevant material for the practical exam will be presented

in the lectures and tutorials.60 % of the credits for this module will come from an

individual, independent piece of work (project). Further

reading for the project will depend on your chosen topic.


Introduction




Reading

Stata Resources

ELE

Manuals and related material

Documentation Stata v13 comes with a complete set of manualsin pdf format

Books on Stata Visit the Stata Bookstore at

http://www.stata.com/bookstore/for books

on Stata. Several of them are available in the library.

On the web Many academics use Stata for their teaching and

research. A simple web search will come up with

lots of information.

http://www.stata.com/bookstore/http://www.stata.com/bookstore/http://www.stata.com/bookstore/http://www.stata.com/bookstore/

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Introduction




Reading

Stata Resources

ELE

Materials on the web

There are several interesting web pages devoted to Stata.1 Official Stata web site: www.stata.com

2 Stata FAQs are at

http://www.stata.com/support/faqs/.

3 Current issue of the Stata Journal:

http://www.stata-journal.com/current.html

4 Discussion list server:

http://www.stata.com/statalist/

5 Browse the official Stata web site for more (SSC software

archive, UCLA Stata site, etc.).


Introduction




Reading

Stata Resources

ELE

Materials on ELE

Lecture notes, handouts and additional exercises.

Data files.Please use the data files from this course only for

the purpose of the course. You may not distribute dataunless it is explicitly stated that you are allowed to do so. You

may not use the data for commercial purposes, or attempt to

sell the data.

Stata code (in the form of do-files and ado-files). (The

copyright of any Stata code distributed in class lies with the

authors.)

Discussion board: feel free to discuss issues like generaldata analysis questions, Stata problems etc.

More information regarding the practical exam and project to

follow soon.

http://www.stata.com/http://www.stata.com/support/faqs/http://www.stata.com/support/faqs/http://www.stata-journal.com/current.htmlhttp://www.stata.com/statalist/http://www.stata.com/support/faqs/http://www.stata-journal.com/current.htmlhttp://www.stata.com/statalist/http://www.stata.com/statalist/http://www.stata-journal.com/current.htmlhttp://www.stata.com/support/faqs/http://www.stata.com/

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Introduction




What is Stata?

Getting started in Stata

Empirical research in four easy steps!

Stata basics

Changing the data

Bits and pieces

Basics (cont.)

Variables window Lists all variables in the dataset, alongside

their labels. Try left, right click and selection.

Properties window This window displays information about the

dataset (number of observations, number of

variables, size), and information about a variable

that has been selected in the Variables window. It

also allows you to edit certain properties of avariable such as labels.


Introduction




What is Stata?Getting started in Stata


Stata basics

Changing the data

Bits and pieces

Is there a college premium in the wages of American

women?

Step 1 Formulate research question.

Step 2 Find appropriate data to help answer research

question. First type clear , then type

sysuse nlsw88

Step 3 Conduct analysis. regress wage collgrad

Step 4 Interpret findings and report. The college premium

is estimated to be 3.62 US Dollars.


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Introduction




What is Stata?



Stata basics

Changing the data

Bits and pieces

Results

. regress wage collgrad

Source | SS df MS Number of obs = 2246

---------+----------------------------- F( 1, 2244) = 172.44

Model | 5307.01034 1 5307.01034 Prob > F = 0.0000

Residual | 69060.9571 2244 30.7758276 R-squared = 0.0714

---------+----------------------------- Adj R-squared = 0.0709

Total | 74367.9674 2245 33.1260434 Root MSE = 5.5476

----------------------------------------------------------------------

wage | Coef. Std. Err. t P>|t| [95% Conf. Interval]---------+------------------------------------------------------------

collgrad | 3.615502 .2753268 13.13 0.000 3.07558 4.155424

_cons | 6.910561 .1339984 51.57 0.000 6.647788 7.173335

----------------------------------------------------------------------


Introduction






Stata basics

Changing the data

Bits and pieces

On notation

Notation In all lecture notes and exercise sheets, Stata

commands are typeset like this: about . To issue

the command, you need to type aboutat thecommand window and press [Return]. All

commands are also accessible via the menus, but

we will focus on typing commands and writing

simple programs.

File names and paths Some commands only work with the

specified file names or directory names. If you

choose different names, you will need to adjust thecommand accordingly. Sometimes, only the

command name is given, not the complete syntax,

e.g. regress.


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Introduction




What is Stata?



Stata basics

Changing the data

Bits and pieces

Know where you are in Stata

Stata has the concept of a current working directory. This is the

place where all files are saved to and read from by default. To

find out the current working directory, type pwd. It is also shown

in the bottom left corner of the screen. To change to another

directory, use cd newdir .

You should change to the appropriate directory for the project

you are working on, so you can find your files later.

To create a new directory in Stata: mkdir u:\bee3055

To change to that directory: cd u:\bee3055. Repeat for

subdirectories.

You can create the directories via the Windows explorer, too.

But then, dont forget to use cd to change to that directory.


Introduction






Stata basics

Changing the data

Bits and pieces

Reading data into Stata

Double click on a file in Stata formatwillopen the data set in

Statabutwill leave you with an incorrect working directory.Better to start the software and then issue the command

use mydir\mydata , ore use the menus.

If the data are saved as a text file (tab delimited or comma

delimited format): insheet using mydata.txt

We will cover other ways of getting data into Stata as we go

along.

Stata can only have one data set at a time in memory. Tosave your data, type save mydata. This will write a file

mydata.dtain the current directory.


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Introduction




What is Stata?



Stata basics

Changing the data

Bits and pieces

Log your work

Logging the output In order to capture the output in the viewer,you need to open a log file:

log using lecture1.log, replace.

View your output log Once you have finished your Stata session,

type log close to close the log. To view and

print it, type view lecture1.log.

Logging your input When using Stata interactively, it is useful to

log the input as well:

cmdlog using lecture1.do, replace

View your input log At the end of your session, type

cmdlog close to close the log. To view it, clean

it up and print it, type doedit lecture1.do.


Introduction






Stata basics

Changing the data

Bits and pieces

Basic data reporting

Lets start with the pen01aL3data: clear and then

use pen01aL3. It is a random sample from one wave of an

employment panel data set.browse lets us view the data in spreadsheet format

(write-protected). Note the different colors.

describe shows basic features of the data: number of

observations and number of variables, storage type, labels

etc.

list lists all observations and variables in the result

window. (To scroll, press the space bar, and to break, typeq .)

To use commands like list properly, we need to know

about the basic syntax shared by most Stata commands.


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Introduction




What is Stata?



Stata basics

Changing the data

Bits and pieces

Basic syntax

The syntax of list:

list [varlist] [if] [in] [,options]

All components in square brackets are optional (as we saw

before, list on its own works fine).

varlist Restricts the execution of the command to one or

more variables. Examples for varlist:lnw

id pencil city

exp-civil


Introduction






Stata basics

Changing the data

Bits and pieces

Basic syntax (continued)


if Restricts the execution of the command to theobservationsfor which a logical expressionis true.

Example: list if lnw < 2

Logical expressions in Stata may include> greater than

< less than

>= greater than or equal to

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Introduction




What is Stata?



Stata basics

Changing the data

Bits and pieces

Basic syntax (continued)


in Restricts the execution of the command to the

specifiedrange of observations. Examples:

list in 1/5

list in 93

list in -10/l

Note that in refers to the current sort order of thedata. ifand inmay be specified together:

list if lnw < 2 in 1/5


Introduction






Stata basics

Changing the data

Bits and pieces

Basic data description

Next to describe and list, these are very useful:

summarize produces summary statistics.

tabulate produces one-way or two-way tabulations.

count counts the number of observations.

Try these descriptive graphs:

histogram lnw

graph box lnw

graph hbox lnw, over(female, total)spikeplot ed

dotplot lnw, over(female)


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Introduction




What is Stata?



Stata basics

Changing the data

Bits and pieces

How to get help

Online help Typing help command will display the help file forcommand. Example: help tabulate.

Search In case you dont know the name of a command, or

you need help for a function: search whatever .

Links In online help files, follow the link to see help files for

related entries.

Manuals The manuals contain much more information than

the online help files, along with examples illustratingthe use of the commands. If you work with data

seriously, you should consult the manuals on the

commands you use.


Introduction






Stata basics

Changing the data

Bits and pieces

Operators in Stata

Logical operators Stata knows about the logical operators &

(AND),| (OR), != (NOT equal). A synonym for ! is .

Relational operators Relational operators (>,=,

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Introduction




What is Stata?



Stata basics

Changing the data

Bits and pieces

Changing the data

Knowing about the operators, we can start changing our data, e. g.

generating new variables and replacing the content of the existing ones.

generate This command lets you add a new variable to your data.Example: use the log wage to generate the nominal

wage. generate wage = exp(lnw) does this.

exp()denotes the exponential function.

replace If you want to replace the contents of an existing variable,

you will need to use replace . Example:

generate experienced = 1 if exp >=20

replace experienced = 0 if exp < 20

Stata has many mathematical and statistical functions. Type

help functions or use the expression builder to find out more.


Introduction






Stata basics

Changing the data

Bits and pieces

Extending generate

Thegeneratecommand works on a row-by-row basis. To see

this, use theexampledata: clear and use example

generate sumx = sum(x)

list

Advantage:

You can exploit this feature, to create AR processes and the like.

Disadvantage:

What if you want to create a constant, equal to the sum of x?

Use egenfor this:

drop sumx

egen sumx = sum(x)


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Introduction




What is Stata?



Stata basics

Changing the data

Bits and pieces

Explicit subscripting

Stata allows you to refer to a specific observation (row):

generate a = x[5]

which will copy the value of x in observation no. 5 into every row

of a new variable called a.

Thecurrentobservation number can be referred to as [_n]. The

total number of observations can be referred to as [_N]. This

allows to create lags and leads:

generate xl1 = x[_n-1]

generate xf1 = x[_n+1]

Generate a unique ID in your data set:

generate id = _n


Introduction






Stata basics

Changing the data

Bits and pieces

Sort order

In many situations it is important that your data is sorted in a certainorder, i. e. when using explicit subscripting. Try the following using the

pen01aL3 data:

sort female sorts your data in ascending order by female (so,

males first). sort female ptime sorts the data by female, and

within female, by ptime. We can specify more variables if necessary.

If the sorting criteria do not uniquely identifyeach observation, the dataare sorted randomly within the remaining subgroups.

Example: female

sort female

list id in 1

sort ptime Repeat.


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Introduction




What is Stata?



Stata basics

Changing the data

Bits and pieces

The by: prefix

Stata offers an easy way to repeat commands for different subgroups.To find out the mean log wage for males and females, we can type

by female: summarize lnw

Note that the data have to be sorted by female for this to work. If theyare not, we can either issue a sort female prior to the command,or we can modify our command to include the sorting:

bysort female: summarize lnw

Combining the by: prefix with explicit subscripting is a powerful tool fordealing with panel data. Example of usage in cross section:

bysort female (lnw): generate wagerank = _n

browse id female lnw wagerank


Introduction






Stata basics

Changing the data

Bits and pieces

Data that are shipped with Stata

Stata comes with several data sets. These are very useful to

work out the examples in the manuals and online help files;

quickly demonstrate a Stata command;

demonstrate a Stata problem you ran into with your own data. Ifyou manage to replicate it with one of the built-in data files, it iseasier for someone else to help you.

To see a list of system data files: sysuse dir

To load a system data file into memory: sysuse name

The most commonly used system data file is auto.dtawhich containsthe measurements, price and mileage of 74 cars. Many posts onstatalist use the auto data to illustrate a problem or a solution.

Advice:Never ever overwrite system data files.


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Introduction




What is Stata?



Stata basics

Changing the data

Bits and pieces

Save your data to disk or not?

As long as you record all steps you undertook on your data( cmdlog), there is no need to save your changed data to

disk.

After a major cleanup, it is advisable to save the data and

work with the clean version from then on.

Avoid having many versions of your data around. Decide on

one (clean) version and freeze it.

The best way to keep track of your work is to organize it in

do-files. We will discuss this later.


Introduction






Stata basics

Changing the data

Bits and pieces

Memory

The size of the data you can have in Stata is limited by the

amount of memory that is allocated to Stata, which is limited by

the amount of RAM in your computer.

Type help memory to find out about memory usage.

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