Economic Rhetoric (Econ 197)

Economic Rhetoric (Econ 197)

Problem Set 1

(Due Thursday 10/5)

I have created a Stata dataset from the latest U.S. Census Bureau’s American Community Survey (ACS). The dataset is available for downloading from my webpage at:

http://people.ucsc.edu/~rfairlie/courses/econ197/

It is the “Small Dataset for Problem Sets.” The dataset contains observations for about 20,000 people between the ages of 18 and 64 in the United States. This is only a small sample of the 3 million people surveyed for the ACS. I also only included a subset of the variables available in the ACS. A codebook for the included variables in the “Small Dataset” is also included on the web page.

Four steps are involved in accessing the data for this problem set.

1. Download the Stata dataset from my web page and copy it to a hard drive or a flash drive. The filename for the dataset is “acssmall.dta.”

2. In Stata go to FILE, OPEN and then choose the dataset.

3. Choose DATA, DATA EDITOR to see data in spreadsheet form. The variable names are listed at the top and the values for each person are listed below. Note you need to close

4. Close DATA EDITOR and you are ready to work with the data in STATA.

Problems

1. Calculate and report sample means for all variables in your data set.

Use STATISTICS, SUMMARIES, SUMMARY STATISTICS, SUMMARY STATISTICS to calculate these means.

2. What is average person’s income in the sample? What is the highest person’s income in the sample? What is the lowest person’s income in the sample?

3. We want to create a new variable that measures whether the person has a college degree. Use

Choose DATA, CREATE OR CHANGE VARIABLES, CREATE NEW VARIABLE, then in the box for “Generate variable” enter college, in “Contents of new variable” enter schyears >= 16

Go to the Data Editor and check to make sure that the new variable was created properly. It should equal 1 if the person has 16 or more years of school and should equal 0 if the person has less than 16 years of school. What percent of the sample has a college degree?

4. We are interested in examining business ownership among young workers. What is the business ownership rate of young adults (ages less than or equal to 30)? To select a subsample in Stata for calculating means, you would use STATISTICS, SUMMARIES, SUMMARY STATISTICS, SUMMARY STATISTICS, then choose the BY/IF/IN tab, then at the IF: EXPRESSION box type agep <= 30. This will calculate means of all variables for the subsample of young people.

5. We are interested in creating a simple regression model for the determinants of person’s income. The dependent variable should be person’s income (pincp) and the independent variables should be agep and schyears. Use STATISTICS, LINEAR MODELS, LINEAR REGRESSION to run a regression.