Computer Lab

The goal of this lab is to learn how to use StataQuest to do data analysis and how to use the diagnostic plots provided by Stataquest to check the model assumption. We will need the following commands for the regression analysis: Statistics Simple Regression. There are many interesting diagnostic plots provided by StataQuest. To understand them, we can use the following example:

First open the data file reg.dta under the datagen directory. There are several variables in the file:

• X: the independent variable.
• e: the deviation which contains a random sample from a normal distribution.
• Y: Y=1+X+e
• :
• :
• : = Y except the observation corresponding to the max(X) is replaced by the original Y value plus 20.
• : = Y except the observation with the X value closest to is replaced by the original Y value plus 20.

You may look at the normal quantile plot of e and the scatter plot of e versus X and then compare them with the diagnostic plots provided by Stataquest after you regress Y on X. You may also want to get the diagnostic plots after regressing and on X, respectively. What do you learn from the plots? Now compare the LS lines for Y, , vs. X. What kind of observation has more potential to be influential?