Percentiles (Graphing)

Using the nlsw88 data,

1. Use sum, detail to get detailed summary statistics for wage. Store the value of the 5th and 95th percentile as locals called p5 and p95. Finally, tell stata to display two lines of text, followed by the actual value of the 5th and 95th using the values stored in p5 and p95:

5th percentile of wage:
95th percentile of wage:

When we use kdensity we are drawing the probability density function (PDF). Sometimes it’s convenient to work with the cumulative distribution function (CDF) rather than the density. The CDF shows, for each wage value, the fraction of workers with wage less than or equal to that value.

2. Use the cumul command to create the empirical CDF of wage: cumul wage, gen(F_wage). Then draw the CDF using the command twoway line. Note that this is our first time graphing more than one variable. You will need to include F_wage and then wage. You will also need to use the option sort to get the smooth CDF that we are looking for.

Title the graph “Cumulative distribution of wage”
Title the x-axis “Hourly wage (1988 dollars)”
Title the y-axis “Cumulative probability”

3. Now we will add a line to the graph at 5% (0.05 on the y-axis) to mark the 5th percentile using yline. Recall in the lecture we added vertical lines using xline.

Give the line a dash pattern
Color the line maroon
Title this new graph “CDF of wage with 5% cutoff”