clear all
capture log close
set more off
 use "L:\Alma Kudebayeva\Fall2017\ECN5012 Econometrics\Chapter_1\eaef21.dta", clear

log using example_1.txt, text replace

br
des 

sum  EARNINGS S, detail

histogram EARNINGS

histogram S

sum EARNINGS if MALE==1 

sum EARNINGS if MALE==0

sum EARNINGS  if MALE==1 & ETHWHITE==1 
sum EARNINGS  if MALE==1 &  ETHBLACK==1 

histogram EARNINGS if MALE==1

histogram EARNINGS if MALE==0

gen LEARNINGS=ln(EARNINGS)  

histogram LEARNINGS if MALE==1

histogram LEARNINGS if MALE==0

sum LEARNINGS  if MALE==1 & ETHWHITE==1 



gen age1=0
replace age1=1 if AGE<30

gen age2=0
replace age2=1 if AGE>=30 & AGE<=37

gen age3=0
replace age3=1 if AGE>=38 & AGE<=43

gen age4=0
replace age4=1 if AGE>=44 & AGE<=48


egen MLE1=median(LEARNINGS) if age1==1 
egen MLE2=median(LEARNINGS) if age2==1 
egen MLE3=median(LEARNINGS) if age3==1 
egen MLE4=median(LEARNINGS) if age4==1 


gen MLE=MLE2 if age2==1
replace MLE=MLE3 if age3==1
replace MLE=MLE4 if age4==1



twoway (scatter MLE AGE)


twoway (scatter LEARNINGS AGE if age2==1)

twoway (scatter LEARNINGS AGE if age3==1)

twoway (scatter LEARNINGS AGE if age4==1)
********EXERCISE 2**********


corr S  EARNINGS
twoway (scatter EARNINGS S)

reg EARNINGS S 

predict EARNINGS1 
twoway (fpfit EARNINGS1 S) (scatter EARNINGS S)

gen SDEV = S - 13.67

reg EARNINGS  SDEV 


test S=0.25


log close