Homework One

1) Observations: 10, 4, 5, 5, 6, 7, 8, 4, 9, 12, 0, 3, 4, 2, 2, 0, 1, 6, 10

a) Calculate the mean

b) Calculate the median

c) Calculate the Standard Deviation (treat as a sample; use formula on p. 65 of SW)

2) Import the Baseball_salaries.txt data set (available from the class web page: http://mason.gmu.edu/~atabarro/Introduction_to_Econometrics.html) into Stata. Either type insheet using filename, tab clear or from the file menu choose import then ascii data created by spreadsheet.

a) Find and compare the mean and median salary (use summarize salary, detail).

b) Graph and print out a histogram of the salaries, (use histogram salary, percent).

c) Using the above comment on the salary structure in baseball.

d) Which team pays the highest salaries? Which the lowest? (Do the following: sort team then by team: summarize salary.

e) Using the salary data which position do you think is most important between first base, second base and third base?

3) Using the cancer mortality data on the class website, create a scatterplot overlaid with a linear regression line. (Try the scatter and lfit commands separately to see what they do but hand in a printout of the command below). Think about what this regression means. What other sorts of information would you want to know to be sure a causal relationship is being measured?

twoway (scatter mortality exposure) (lfit mortality exposure)