Assignment $1$

Instructions

For question $1,$ you can submit a PDF or scanned copy of your work. Please consult with me if you don't know how to accomplish this.

For questions $2-5,$ you must use STATA, and must turn in a copy of your Do$-$file. The Do$-$file must perform every task below neatly and correctly.

The work you hand in must be your own. You must NOT copy any answers from anyone or anywhere else. Please review FIU's policy on academic misconduct for more information.

Questions

Derive the second$-$order condition $($SOC$)$ for the OLS estimator $-$ see class notes for week $2,$ equations $($I$)$ and $($II$)$ as a starting point.

From the questions at the end of Chapter $1$ of your texbook, questions C$1.($i$),$ C$1.($ii$),$ and C$1.($iii$)$ using the WAGE$1$ dataset.

Generate the dataset below using STATA's command line:

var$1$ var$2$ var$3$

$2610$

$4326$

$10244$

Hint: You might want to use the help function to look at at the input command

$($a$)$ Using STATA's command line, create a variable named var$4$ with values: $1$ in row $1,2$ in row $2,$ and $1$ in row $3.$

$($b$)$ Rename the variable var$4$ to sex $,$ and use the label command to define value labels male for value $1,$ and female for value $2.$

$($c$)$ Use the generate command with the $\_$n system variable to create a variable called idx that assigns a unique number to each row

$($d$)$ Rename variables var$1,$ var$2,$ and var$3$ as time$1,$ time$2,$ and time$3$

$($e$)$ Use the reshape command to convert the dataset into long form by year

$($f$)$ Use the egen command to generate a new variable named d that is equal to the squared difference between the variable time at each occasion and the average of time for each subject

$($g$)$ Drop the observation$/$row corresponding to the third year for id$=2$

The following table contains monthly housing expenditures for $10$ families:

Family Monthly Expenditures

$1300$

$2440$

$3350$

$41100$

$5640$

$6480$

$7450$

$8700$

$9670$

$10530$

$($a$)$ Calculate and report the average monthly housing expenditure

$($b$)$ Calculate and report the median monthly housing expenditure

$($c$)$ Modify the data to reflect an increase from $$700$ to $$900$ for Family #$8($expenditures for all other families remain the same$).$ Report the average and median house expenditures

Vella and Verbeek $(1998)$ use the National Longitudinal Survey Youth Sample dataset to study the impact union membership has on wages for young males. You can get the dataset from here.

$($a$)$ Create a variable equal to the exponential of lwage.

$($b$)$ Generage a new variable that represents the annual salary $($for each observation$)$

$($c$)$ Collapse the data to obtain the mean annual salary by year and ethnic$|$racial group, black, hispanic, other, etc.

$($d$)$ Generate a line graph showing the mean annual salary over time for each ethnic$|$racial group.