Random Numbers (Graphing)

Using the nlsw88 data,

1. Simulate and then graph a theoretical log-normal distribution.

Start by setting the seed to the same seed that we set when we simulated a normal distribution for ttl_exp.
Next, create a variable called wage_norm that has a normal distribution with mean 1.831 and standard deviation of 0.6615.
To make a log-normal distribution, we need to exponentiate wage_norm using Stata’s built in math function exp(). Call this new variable wage_logn.
Finally, draw the distribution of this new variable using kdensity.

2. Graph wage and the log-normal distribution on same graph.

Give the graph a descriptive title as well as labelling the x-axis and y-axis.
Create a legend and place it below the graph (pos) and in two columns (col).
Label the two lines as “Simulated log-normal” and “Observed wage”.