Coding for Applied Economists

Fitted Lines by Group (Graphing)

Using the eth_allrounds_final data, connect the fitted line on a scatter plot to the underlying regression.

1. Create a scatter plot with harvest value (harvest_value_USD) on the y-axis and farm size (farm_size) on the y-axis.

  • Add a fitted line with a confidence band using lfitci in a twoway graph.
  • Place the legend on the bottom (pos) in three columns (col).
  • Use very small, hollow circular markers for the points.
  • Change the color of the line to maroon and the pattern of the line to be solid.
  • Make the color of confidence band gray and partially transparent (gray%50) so the points and line remain visible.
  • Make the color of the confidence interval lines marron and partially transparent (maroon%25) so the points and line remain visible (use alcolor).
  • Label the x-axis “Inorganic Fertilizer (USD)” and the y-axis as “Maize Yield (kg)”

2. Run the corresponding regression:

   regress        harvest_value_USD farm_size

1. What does a one-unit increase in farm size represent?
2. How much does harvest value change, on average, for a one-unit increase in farm size ? 3. Is the relationship between harvest value and farm size statistically significant?

3. Now let the relationship differ by whether the household is using traditional seed (improved == 0) or improved seed (improved == 1). The easiest way to do this is copy the code that makes the graph in problem 1 and then edit it as follows:

  • Change the scatter plot to display only traditional seed and change the marker color to be maroon%50.
  • Add a new scatter plot that displays only improved seed and change the marker color to be navy%50.
  • Change the fitted line so that it only fits to observations of traditional seeds.
  • Add a new fitted line that fits to observations of improved seed.
  • Using lcolor, change the color of the fitted line so that it matches the color of the corresponding markers (so traditional is maroon and improved is navy).
  • Using alcolor, change the color and transparency of the confidence interval lines so that the correspond to the markers and are transparent at %25.
  • Change the legend so it is in two columns. Use order to restrict the legend to only printing the third and fifth item in the legend and label them as 3 "Traditional Seeds" and 5 "Improved Seeds"

4. Run a regression that allows interacts farm size with improved see:

   regress        harvest_value_USD c.farm_size#i.improved

1. How much does harvest value change, on average, for a one-unit increase in farm size when traditional seed is used? 2. How much does harvest value change, on average, for a one-unit increase in farm size when improved seed is used? 3. Are these relationships between harvest value and farm size-seed type statistically significant?