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Statistical Software Application in Economics: Chapter 1: Introduction To Softwares

The document provides an overview of the Stata statistical software application. It describes Stata as a complete, integrated statistical package for data analysis, management and graphics. It also outlines some of Stata's advantages such as its powerful capabilities for statistical analysis, data management and visualization. However, it notes that Stata requires learning a programming language.

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gebreHiwot Alemante
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4K views54 pages

Statistical Software Application in Economics: Chapter 1: Introduction To Softwares

The document provides an overview of the Stata statistical software application. It describes Stata as a complete, integrated statistical package for data analysis, management and graphics. It also outlines some of Stata's advantages such as its powerful capabilities for statistical analysis, data management and visualization. However, it notes that Stata requires learning a programming language.

Uploaded by

gebreHiwot Alemante
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
  • Introduction to Softwares: Introduces the document with an overview of statistical software applications in economics.
  • Packages of Stata: Details the features, functions, and advantages of different Stata packages used in statistical analysis.
  • STATA Interface: Describes the different windows in Stata's interface with explanations for each element like Command, Variables, and Results Windows.
  • Basic Rules of Stata Language Syntax: Covers the fundamentals of Stata's language syntax, including command structure and variable naming conventions.
  • Excel in Statistical Analysis: Explains Excel's capabilities and limitations in performing statistical analyses, including data organization and basic statistical functions.
  • OLS Estimation: Demonstrates Ordinary Least Squares (OLS) estimation using Stata, Excel, and manual calculations with examples.
  • Software Comparisons: Compares various statistical software packages such as SAS, R, and others, highlighting their features and applications in data analysis and report writing.

Statistical Software Application in

Economics

Chapter 1: Introduction to Softwares

By: Habtamu Legese


12/15/2022 1
https://youtube.com/@economicsbyhabtamu
Introduction to statistical analysis and programs
✓ Wide range of statistical programs available • SAS
• R
www.statistics.com – over 150 listed • S-plus
• Stata
programs • Sigmastat
• Excel
✓ Differences in ease of use, types of analysis, • Minitab
popularity, and cost. • Stats Direct
• Graphpad Prism
✓ Need to decide what sort of program would • SPSS
• EViews
be most effective for your research needs.
By: Habtamu Legese
12/15/2022 2
https://youtube.com/@economicsbyhabtamu
Stata
• A complete, integrated statistical package that provides
everything you need for data analysis, data management,
and graphics.
• With a point-and-click interface, as well as intuitive
command syntax and online help, Stata is easy to use, fast,
and accurate.
• However programming language is required and this may
take some time to learn.
• Stata is particular useful to professionals working in the
areas of economic research and medical research .
By: Habtamu Legese
12/15/2022 3
https://youtube.com/@economicsbyhabtamu
Cont.
• Stata is an easy to use but powerful data analysis
software package that features strong capabilities for:
• Statistical analysis
• Data management and manipulation
• Data visualization
• Stata offers a wide array of statistical tools that
include both standard methods and newer, advanced
methods, as new releases of Stata are distributed
annually

By: Habtamu Legese


12/15/2022 4
https://youtube.com/@economicsbyhabtamu
Cont.
• STATA is an integrated statistical analysis package.
• It has got started in California, in the mid-1980s by William
Gould.
• It was written in the C programming language.
• At one time, the name "S" was considered, then "Stata“
(Statistics Data)
• Strong in handling and manipulating large data sets.
By: Habtamu Legese
12/15/2022 5
https://youtube.com/@economicsbyhabtamu
Packages of Stata
Four (4) different packages of Stata are available:
• Stata MP (Multi-Processor) -the most powerful
• Stata SE (Special Edition)
• Stata IC (Inter-Cooled)
• Small Stata
The main difference among these versions is the maximum number
of variables and observations that can be handled.
Stata is a command-driven and also has pull-down menus
By: Habtamu Legese
12/15/2022 6
https://youtube.com/@economicsbyhabtamu
By: Habtamu Legese
12/15/2022 7
https://youtube.com/@economicsbyhabtamu
STATA: Advantages
• Command syntax is very compact, saving time
• Syntax is consistent across commands, so easier to learn
• Competitive with other software regarding variety of statistical
tools
• Excellent documentation
• Exceptionally strong support for
• Econometric models and methods
• Complex survey data analysis tools

By: Habtamu Legese


12/15/2022 8
https://youtube.com/@economicsbyhabtamu
STATA: DISADVANTAGES
• Limited to one dataset in memory at a time
• Must open another instance of Stata to open another dataset
• This won’t be a problem for most users

By: Habtamu Legese


12/15/2022 9
https://youtube.com/@economicsbyhabtamu
NAVIGATING STATA’S INTERFACE
Five windows in the main Stata interface:
1. Variables Window: This window displays a list of all variables in your data set.
2. Properties Window: This window displays the properties of each variable in
your data set.
3. Command Window: This window is the place where commands are to be
written. When pressing the Enter key, Stata immediately executes the command .
4. Results Window: This is the window where results are displayed. Stata
commands are preceded by a period (.).
5. Review Window: displays a list of all commands you have used in the order you
used them. If you click on any command in this window, it will be immediately
copied to the command window.

By: Habtamu Legese


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https://youtube.com/@economicsbyhabtamu
Command
window

You can enter commands


directly into the Command
window
This command will load a
Stata dataset over the
internet
Go ahead and enter the
command

By: Habtamu Legese


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https://youtube.com/@economicsbyhabtamu
Variables window
Once you have data loaded,
variables in the dataset will be
listed with their labels in the
order they appear on the dataset
Clicking on a variable name
will cause its description to
appear in the Properties
Window
Double-clicking on a variable
name will cause it to appear in
the Command Window

By: Habtamu Legese


12/15/2022 12
https://youtube.com/@economicsbyhabtamu
Properties window

The Variables section


lists information about
selected variable
The Data section lists
information about the
entire dataset

By: Habtamu Legese


12/15/2022 13
https://youtube.com/@economicsbyhabtamu
Review Window
The Review window
lists previously issued
commands
Successful commands
will appear black
Unsuccessful commands
will appear red
Double-click a command
to run it again
Hitting PageUp will also
recall previously used
commands By: Habtamu Legese
12/15/2022 14
https://youtube.com/@economicsbyhabtamu
Figure 1: The Stata widows without database
Variables
Review

Results

Command

By: Habtamu Legese


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https://youtube.com/@economicsbyhabtamu
A few points to be emphasis
1. The font style and size can be changed by right-clicking any window and selecting
Font.
2. The default color schemes in the Results window can also be changed by right
clicking in it and selecting Preferences, and then choosing a different color
scheme
3. In case a window ever disappears, just click on Window tool bar and click on the
missing window to make it reappear. Also we can stretch any window just as we would
resize the window.
4. In addition to these windows, there are 4 additional windows: Data editor, Do-file
editor, Graphics window and Help viewer.
By: Habtamu Legese
12/15/2022 16
https://youtube.com/@economicsbyhabtamu
Basic Rules of Stata Language Syntax
▪ The basic structure of Stata language syntaxis: command
[varlist][,options]
▪ Stata commands and variable names are CASE-SENSITIVE!
▪ All Stata commands are lowercase.
▪ Stata allows abbreviations of some commands.
▪ A Stata variable name can be up to 32 characters long variable name must
start with a letter(can contain letters and numbers). spaces are not allowed;
use an underscore (_)instead.
▪ You can add comments preceded by an asterisk(*).

By: Habtamu Legese


12/15/2022 17
https://youtube.com/@economicsbyhabtamu
Working directory

At the bottom left of the


Stata window is the address
of the working directory
Stata will load from and save
files to here, unless another
directory is specified
Use the command cd to
change the working directory

By: Habtamu Legese


12/15/2022 18
https://youtube.com/@economicsbyhabtamu
Stata menus
Almost all Stata users use
syntax to run commands
rather than point-and-click
menus
Nevertheless, Stata
provides menus to run most
of its data management,
graphical, and statistical
commands
Example: two ways to
create a histogram
By: Habtamu Legese
12/15/2022 19
https://youtube.com/@economicsbyhabtamu
Do-files are scripts of commands
• Stata do-files are text files where users can store and run their
commands for reuse, rather than retyping the commands into the
Command window
• Reproducibility
• Easier debugging and changing commands

• We recommend always using a do-file when using Stata

• The file extension .do is used for do-files


By: Habtamu Legese
12/15/2022 20
https://youtube.com/@economicsbyhabtamu
Opening the do-file editor
Use the command doedit to
open the do-file editor
Or click on the pencil and
paper icon on the toolbar

The do-file editor is a text file editor


By: Habtamu Legese
specialized for Stata
12/15/2022 21
https://youtube.com/@economicsbyhabtamu
Syntax highlighting
The do-file editor colors Stata
commands blue Comments,
which are not executed, are
usually preceded by * and are
colored green
Words in quotes (file names,
string values) are colored “red”
Stata 16 features an enhanced
editor that features tab auto-
completion for Stata commands
and previously typed words

By: Habtamu Legese


12/15/2022 22
https://youtube.com/@economicsbyhabtamu
Running commands
from the do-file
• To run a command from the
do-file, highlight part or all of
the command, and then hit
Ctrl-D (Mac: Shift+Cmd+D) or
the “Execute(do)” icon, the
rightmost icon on the do-file
editor toolbar
• Multiple commands can be
selected and executed

By: Habtamu Legese


12/15/2022 23
https://youtube.com/@economicsbyhabtamu
Excel
• Available on almost in all computers.

• Excel is a great program for storing and manipulating data.

• Commonly used statistics and methods are NOT available and it can
perform only a few statistical analyses.

• Its lack of functionality makes it difficult to use for more than


computing summary statistics and simple univariate regression.

By: Habtamu Legese


12/15/2022 24
https://youtube.com/@economicsbyhabtamu
Parts of MS Excel

By: Habtamu Legese


12/15/2022 25
https://youtube.com/@economicsbyhabtamu
Excel has many applications:
➢ Sorting and organizing data
➢ Creating visual representations of the ➢Matrix Operations
data o Addition/Subtraction
➢ Addition, Subtraction, Division, o Multiplying
Multiplication of Cells o Inverse
➢ Statistical analysis o Determinant
o Average (Mean)
o Median
o Quartile
o Standard deviation
o t-Test
o Covariance
o Regression
By: Habtamu Legese
12/15/2022 26
https://youtube.com/@economicsbyhabtamu
Example: OLS estimation with Stata, Excel and
Hand Firm (i) Sales (Y ) Advertising Expense (X )
i i

1 11 10
Find
2 10 7
3 12 10
መ 𝛼ො and R
𝛽, 4 6 5
squared 5 10 8
6 7 8
7 9 6
8 10 7
9 11 9
By: Habtamu Legese
10 10 10
12/15/2022
https://youtube.com/@economicsbyhabtamu 27
Excel

By: Habtamu Legese


12/15/2022 28
https://youtube.com/@economicsbyhabtamu
Stata

By: Habtamu Legese


12/15/2022 29
https://youtube.com/@economicsbyhabtamu
Regression by Hand
X i2 96
i Yi Xi X iYi Y = = 9.6
1 11 10 110 100 10
. 2 10 7 70 49 80
X= =8
3 12 10 120 100 10
4 6 5 30 25
ˆ
=  X iYi − nXY
 i
5 10 8 80 64
X 2
− n X 2
6 7 8 56 64
7 9 6 54 36
ˆ 789 − 10(8)(9.6)
= = 0.75
8 10 7 70 49 668 − 10(8) 2

9 11 9 99 81
10 10 10 100 100 ˆ = Y − ˆX
12/15/2022
Ʃ 96 80 789 668
By: Habtamu Legese
https://youtube.com/@economicsbyhabtamu
ˆ = 9.6 − 0.75(8) = 3.6 30
i Yi Xi 𝑋𝑖 − 𝑋ሜ Y−𝑌ሜ 𝑥y 𝑥𝑖2 𝑦𝑖2
1 11 10 2 1.4 2.8 4 1.96
2. 10 7 -1 0.4 -0.4 1 0.16
3 12 10 2 2.4 4.8 4 5.76
4 6 5 -3 -3.6 10.8 9 12.96
5 10 8 0 0.4 0 0 0.16
6 7 8 0 -2.6 0 0 6.76
7 9 6 -2 -0.6 1.2 4 0.36
8 10 7 -1 0.4 -0.4 1 0.16
9 11 9 1 1.4 1.4 1 1.96
10 10 10 2 0.4 0.8 4 0.16
Ʃ 96 80 0 0 By: Habtamu Legese
21 28 30.4
12/15/2022 31
https://youtube.com/@economicsbyhabtamu
By: Habtamu Legese
12/15/2022 32
https://youtube.com/@economicsbyhabtamu
SAS
Software system for data analysis and report writing.

Can store data values and retrieve them, modify data,


compute simple statistics, and create reports all in one
SAS session.

Difference between SAS and most statistical packages is


that SAS incorporates a data-base management system
and a high-level programming language.

By: Habtamu Legese


12/15/2022 33
https://youtube.com/@economicsbyhabtamu
Also SAS software which provides graphics, forecasting,
data entry, and sophisticated statistics.

Designed for use by statisticians, researchers, and


engineers.

Key features: analysis of variance, regression, categorical


data analysis, multivariate analysis, survival analysis,
psychometric analysis, cluster analysis, nonparametric
analysis, survey data analysis.
By: Habtamu Legese
12/15/2022 34
https://youtube.com/@economicsbyhabtamu
R
• R is a free software environment for statistical computing and
graphics.
• R has its own syntax and can operate on any platform Windows,
UNIX, etc.
• R provides a wide range of statistical and graphical techniques.
• R is available as free software under the terms of the Free Software
Foundation’s GNU General Public License in source code form.
• Developed by same individuals that created S-plus
By: Habtamu Legese
12/15/2022 35
https://youtube.com/@economicsbyhabtamu
Minitab
• A computer program designed to perform basic and advanced
statistical functions.
• It combines the user-friendliness of Microsoft Excel with the
ability to perform complex statistical analysis.
• Extensive online help is available at any point of a MINITAB
session. Most tasks can be performed by using menus and
selecting options in dialog boxes.
• However, MINITAB also offers a macro facility that allows
you to write MINITAB routines to automate repetitive tasks.

By: Habtamu Legese


12/15/2022 36
https://youtube.com/@economicsbyhabtamu
SigmaStat 3.5
• Walks you step by step through the analysis of your data
• You don’t need to know which test is right for your data
• Can do regression, ANOVA, non-parametric tests,
correlations, power and sample size calculations, survival
analysis etc.
• Automatically checks your data against assumptions
• Generates written report that interprets your analysis results in
plain English

By: Habtamu Legese


12/15/2022 37
https://youtube.com/@economicsbyhabtamu
StatsDirect
• Easy to use
• Technically advanced
• Comprehensive – broad coverage of methods.
• Workbooks (similar to Excel spreadsheet)
• Import any common spreadsheet data
• Import text based data (formatted or plain)
• Windows metafile scaleable graphics (can edit components in
Word)

By: Habtamu Legese


12/15/2022 38
https://youtube.com/@economicsbyhabtamu
Graphpad Prism
• Powerful combination of basic biostatistics, curve fitting,
and scientific graphing in one comprehensive program.
• Ideally suited to data plotting and analysis applications in the
life sciences.
• Designed for laboratory and clinical researchers.
• Guides you through the analysis process and can provide
guidance when choosing a test and interpretation of results.
• Useful for basic statistical comparisons (t-tests, ANOVA,
nonparametric comparisons) but is not a replacement for a
statistics program.
By: Habtamu Legese
12/15/2022 39
https://youtube.com/@economicsbyhabtamu
SPSS
• Originally it is an acronym of Statistical Package for the
Social Science but now it stands for Statistical Product and
Service Solutions

• One of the most popular statistical packages which can


perform highly complex data manipulation and analysis
with simple instructions.

By: Habtamu Legese


12/15/2022 40
https://youtube.com/@economicsbyhabtamu
Basic structure of SPSS
• There are two different windows in SPSS

• 1st – Data Editor Window - shows data in two forms


• Data view
• Variable view

• 2nd – Output viewer Window – shows results of data analysis

• *You must save the data editor window and output viewer
window separately. Make sure to save both if you want to save
your changes in data or analysis.*

12/15/2022 By: Habtamu Legese https://youtube.com/@economicsbyhabtamu 41


Opening SPSS
•The default window will have the data editor
•There are two sheets in the window:
1. Data view 2. Variable view

12/15/2022 By: Habtamu Legese https://youtube.com/@economicsbyhabtamu 42


Data View window
• The Data View window
This sheet is visible when you first open the Data Editor and this sheet
contains the data
• Click on the tab labeled Variable View

Click

12/15/2022 By: Habtamu Legese https://youtube.com/@economicsbyhabtamu 43


Variable View window
• This sheet contains information about the data set that is stored with the
dataset
• Name
• The first character of the variable name must be alphabetic
• Variable names must be unique, and have to be less than 64 characters.
• Spaces are NOT allowed.

12/15/2022 By: Habtamu Legese https://youtube.com/@economicsbyhabtamu 44


Variable View window: Type
• Type: Click on the ‘type’ box. The two basic types of variables that
you will use are numeric and string. This column enables you to
specify the type of variable.

12/15/2022 By: Habtamu Legese https://youtube.com/@economicsbyhabtamu 45


Variable View window: Width
•Width
•Width allows you to determine the number of characters
SPSS will allow to be entered for the variable

12/15/2022 By: Habtamu Legese https://youtube.com/@economicsbyhabtamu 46


Variable View window: Decimals
• Decimals
• Number of decimals
• It has to be less than or equal to 16

3.14159265

12/15/2022 By: Habtamu Legese https://youtube.com/@economicsbyhabtamu 47


Variable View window: Label
• Label
• You can specify the details of the variable
• You can write characters with spaces up to 256 characters

12/15/2022 By: Habtamu Legese https://youtube.com/@economicsbyhabtamu 48


Variable View window: Values
•Values
•This is used and to suggest which numbers represent which
categories when the variable represents a category

12/15/2022 By: Habtamu Legese https://youtube.com/@economicsbyhabtamu 49


Defining the value labels
•Click the cell in the values column as shown below
•For the value, and the label, you can put up to 60 characters.
•After defining the values click add and then click OK.

Click

12/15/2022 By: Habtamu Legese https://youtube.com/@economicsbyhabtamu 50


EViews
• EViews is an easy-to-use statistical, econometric, and
economic modeling package.
• There are three ways to work in EViews:
• Graphical user interface (using mouse and
menus/dialogs).
• Single commands (using the command window).
• Program files (commands assembled in a script executed
in batch mode).

By: Habtamu Legese


12/15/2022 51
https://youtube.com/@economicsbyhabtamu
EViews Desktop

Command
Window

Object
Window/
Work Area

By: Habtamu Legese


12/15/2022 52
https://youtube.com/@economicsbyhabtamu
EViews Desktop Details
Main Menu

Note: Path/Database/Workfile
Path/directory Database Workfile
can be changed by double-clicking in
each .
12/15/2022
By: Habtamu Legese
https://youtube.com/@economicsbyhabtamu
53
Thank You
https://youtube.com/@economicsbyhabtamu

By: Habtamu Legese


12/15/2022 54
https://youtube.com/@economicsbyhabtamu

Common questions

Powered by AI

R is a free, open-source software environment for statistical computing and graphics that provides a wide range of statistical and graphical techniques . Its free nature and extensive community support make it accessible to a broad audience, including individual researchers and academic users . On the other hand, SAS is a comprehensive data analysis system that integrates database management and a programming language, catering primarily to statisticians, researchers, and engineers who require a robust, commercial-grade solution for data analysis and report writing . SAS is equipped with a variety of built-in procedures and is known for its commercial support, making it more suitable for industry applications where reliability and support are crucial .

SPSS distinguishes itself by providing a dual-window interface consisting of a Data View and Variable View, each designed to simplify data manipulation for users, particularly in social sciences . The software is recognized for its ability to perform complex data manipulations and analyses with relatively simple instructions, making it accessible for users who may not have intense programming expertise . Moreover, SPSS functions are well-aligned with the needs of social scientists, focusing on data manipulation and analysis relevant to the field .

The Do-file editor in Stata is significant because it serves as a script editor where users can write, edit, and execute Stata commands . This feature is essential for ensuring reproducibility of analyses since the commands can be stored, reused, and shared. It also aids in troubleshooting by allowing users to modify and re-run commands without inputting them manually each time . The editor supports syntax highlighting, making it easier to identify errors and improves user efficiency and accuracy in data analysis .

SigmaStat plays a pivotal role in simplifying statistical analysis for users who may not be familiar with advanced statistical concepts by guiding them step-by-step through the analysis of their data . Users do not need to have prior knowledge of which statistical test is appropriate for their data, as SigmaStat automatically checks data against assumptions and suggests suitable methods . This feature, combined with its capability to generate plain language reports interpreting statistical results, lowers the barrier for users who might otherwise struggle with more complex statistical software .

Stata offers a compact command syntax that is consistent across commands, making it time-saving and easier to learn . It is particularly strong in handling large data sets, which is essential in economic research . Moreover, Stata provides comprehensive support for econometric models and methods, which are crucial for modern economic analysis . The software also includes tools for complex survey data analysis and is accompanied by excellent documentation to guide users .

EViews offers several benefits for econometric and economic modeling, including an easy-to-use interface that supports both command-driven and graphical analysis, simplifying the workflow for users familiar with different styles . It is tailored specifically for economic modeling and provides robust econometric and statistical tools designed to address complex economic questions . However, a challenge with EViews could be its reliance on a specialized command language that users must learn to fully exploit its capabilities, potentially creating a learning curve for new users .

Graphpad Prism enhances data analysis in life sciences by combining basic biostatistics, curve fitting, and graphing in one integrated software package . Its design is particularly suited for laboratory and clinical researchers due to its user-friendly interface for data plotting and visual representation, which are critical for interpreting experimental data . Prism also assists users in selecting appropriate statistical tests and offers guidance in result interpretation, streamlining the analysis process for life science applications where visual data analysis is fundamental .

Stata is limited to handling one dataset in memory at a time, which means users must open a new instance of Stata to manage an additional dataset . While this limitation might not be a significant issue for most users, it could present challenges in situations where multiple datasets need to be manipulated or analyzed simultaneously . This differs from some other statistical packages that allow multiple datasets to be open and manipulated in a single session.

Stata's command-driven interface allows users to execute data analysis and management tasks more efficiently by enabling script automation and reproducibility of analyses . The use of syntax ensures that the tasks are performed consistently and accurately, reducing the likelihood of user errors that can occur with point-and-click alternatives . Additionally, the review window facilitates tracking and re-execution of past commands, enhancing workflow efficiency .

Excel's limited statistical functionalities can hinder researchers who require comprehensive data analysis as it offers only basic summary statistics and simple univariate regression . While Excel is versatile for data storage and manipulation, its lack of advanced statistical procedures means that researchers often need to complement it with other statistical software for robust and complex analyses . Consequently, while Excel is accessible and can handle basic tasks, its limitations may necessitate the use of additional tools to achieve the depth and breadth of analysis required for research purposes .

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