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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
Overview of the module
Materials and Reading
Introduction to Stata
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
Overview of the module
Materials and Reading
Introduction to Stata
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:
Eva Poen BEE3055 - Topic 1 5
Introduction
Overview of the module
Materials and Reading
Introduction to Stata
Aim of the moduleWhy Stata?
Format of the course
The Project
Course outline for term 1 (approx.)
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
Overview of the module
Materials and Reading
Introduction to Stata
Aim of the module
Why Stata?
Format of the course
The Project
Course outline for term 1 (approx.)
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.
Eva Poen BEE3055 - Topic 1 7
Introduction
Overview of the module
Materials and Reading
Introduction to Stata
Aim of the moduleWhy Stata?
Format of the course
The Project
Course outline for term 1 (approx.)
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
Overview of the module
Materials and Reading
Introduction to Stata
Aim of the module
Why Stata?
Format of the course
The Project
Course outline for term 1 (approx.)
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).
Eva Poen BEE3055 - Topic 1 9
Introduction
Overview of the module
Materials and Reading
Introduction to Stata
Aim of the moduleWhy Stata?
Format of the course
The Project
Course outline for term 1 (approx.)
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
Overview of the module
Materials and Reading
Introduction to Stata
Aim of the module
Why Stata?
Format of the course
The Project
Course outline for term 1 (approx.)
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.
Eva Poen BEE3055 - Topic 1 11
Introduction
Overview of the module
Materials and Reading
Introduction to Stata
Aim of the moduleWhy Stata?
Format of the course
The Project
Course outline for term 1 (approx.)
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
Overview of the module
Materials and Reading
Introduction to Stata
Aim of the module
Why Stata?
Format of the course
The Project
Course outline for term 1 (approx.)
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?
Eva Poen BEE3055 - Topic 1 13
Introduction
Overview of the module
Materials and Reading
Introduction to Stata
Aim of the moduleWhy Stata?
Format of the course
The Project
Course outline for term 1 (approx.)
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
Overview of the module
Materials and Reading
Introduction to Stata
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.
Eva Poen BEE3055 - Topic 1 15
Introduction
Overview of the module
Materials and Reading
Introduction to Stata
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.
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Introduction
Overview of the module
Materials and Reading
Introduction to Stata
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.).
Eva Poen BEE3055 - Topic 1 17
Introduction
Overview of the module
Materials and Reading
Introduction to Stata
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.
Eva Poen BEE3055 - Topic 1 18
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/8/14/2019 Topic1 x2.pdf
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Introduction
Overview of the module
Materials and Reading
Introduction to Stata
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.
Eva Poen BEE3055 - Topic 1 21
Introduction
Overview of the module
Materials and Reading
Introduction to Stata
What is Stata?Getting started in Stata
Empirical research in four easy steps!
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
Overview of the module
Materials and Reading
Introduction to Stata
What is Stata?
Getting started in Stata
Empirical research in four easy steps!
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
----------------------------------------------------------------------
Eva Poen BEE3055 - Topic 1 23
Introduction
Overview of the module
Materials and Reading
Introduction to Stata
What is Stata?Getting started in Stata
Empirical research in four easy steps!
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
Overview of the module
Materials and Reading
Introduction to Stata
What is Stata?
Getting started in Stata
Empirical research in four easy steps!
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.
Eva Poen BEE3055 - Topic 1 25
Introduction
Overview of the module
Materials and Reading
Introduction to Stata
What is Stata?Getting started in Stata
Empirical research in four easy steps!
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
Overview of the module
Materials and Reading
Introduction to Stata
What is Stata?
Getting started in Stata
Empirical research in four easy steps!
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.
Eva Poen BEE3055 - Topic 1 27
Introduction
Overview of the module
Materials and Reading
Introduction to Stata
What is Stata?Getting started in Stata
Empirical research in four easy steps!
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
Overview of the module
Materials and Reading
Introduction to Stata
What is Stata?
Getting started in Stata
Empirical research in four easy steps!
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
Eva Poen BEE3055 - Topic 1 29
Introduction
Overview of the module
Materials and Reading
Introduction to Stata
What is Stata?Getting started in Stata
Empirical research in four easy steps!
Stata basics
Changing the data
Bits and pieces
Basic syntax (continued)
list [varlist] [if] [in] [,options]
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
Overview of the module
Materials and Reading
Introduction to Stata
What is Stata?
Getting started in Stata
Empirical research in four easy steps!
Stata basics
Changing the data
Bits and pieces
Basic syntax (continued)
list [varlist] [if] [in] [,options]
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
Eva Poen BEE3055 - Topic 1 31
Introduction
Overview of the module
Materials and Reading
Introduction to Stata
What is Stata?Getting started in Stata
Empirical research in four easy steps!
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
Overview of the module
Materials and Reading
Introduction to Stata
What is Stata?
Getting started in Stata
Empirical research in four easy steps!
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.
Eva Poen BEE3055 - Topic 1 33
Introduction
Overview of the module
Materials and Reading
Introduction to Stata
What is Stata?Getting started in Stata
Empirical research in four easy steps!
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
Overview of the module
Materials and Reading
Introduction to Stata
What is Stata?
Getting started in Stata
Empirical research in four easy steps!
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.
Eva Poen BEE3055 - Topic 1 35
Introduction
Overview of the module
Materials and Reading
Introduction to Stata
What is Stata?Getting started in Stata
Empirical research in four easy steps!
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
Overview of the module
Materials and Reading
Introduction to Stata
What is Stata?
Getting started in Stata
Empirical research in four easy steps!
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
Eva Poen BEE3055 - Topic 1 37
Introduction
Overview of the module
Materials and Reading
Introduction to Stata
What is Stata?Getting started in Stata
Empirical research in four easy steps!
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
Overview of the module
Materials and Reading
Introduction to Stata
What is Stata?
Getting started in Stata
Empirical research in four easy steps!
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
Eva Poen BEE3055 - Topic 1 39
Introduction
Overview of the module
Materials and Reading
Introduction to Stata
What is Stata?Getting started in Stata
Empirical research in four easy steps!
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
Overview of the module
Materials and Reading
Introduction to Stata
What is Stata?
Getting started in Stata
Empirical research in four easy steps!
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.
Eva Poen BEE3055 - Topic 1 41
Introduction
Overview of the module
Materials and Reading
Introduction to Stata
What is Stata?Getting started in Stata
Empirical research in four easy steps!
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.