[Stata Program] use http://www.gseis.ucla.edu/courses/data/hsales describe summarize price size plot price size correlate price size regress price size predict yhat predict resid, residual predict zresid, rstandard graph price yhat size, connect(.s) more stem zresid graph zresid, histogram normal bin(15) qnorm zresid sort zresid list size price zresid in 1/5 list size price zresid in -5/l rvpplot size, yline(0) rvfplot, yline(0) drop if price >=250 regress price sizeÊ plot price sizeÊ predict zresid2, rstandard graph zresid2,histogram normal bin(15) [Stata Output] . describe Contains data from http://www.gseis.ucla.edu/courses/data/hsales.dta obs: 93 vars: 5 7 Dec 1999 15:53 size: 2,232 (98.1% of memory free) ------------------------------------------------------------------------------- 1. price float %9.0g sell price in 1,000's 2. size float %9.0g sq feet in 1,000's 3. bdrms float %9.0g number bedrooms 4. bathrms float %9.0g number bathrooms 5. new float %9.0g nl new house? ------------------------------------------------------------------------------- Sorted by: . summarize price size Variable | Obs Mean Std. Dev. Min Max ---------+----------------------------------------------------- price | 93 99.53333 44.18413 17.5 309.4 size | 93 1.649677 .5252607 .4 3.85 . plot price size 309.4 + s | * e | l | * l | | p | r | i | c | * e | * | i | ** * * * n | * * ** * | ***** * ** * * 1 | ******* ** ** , | * **** * ** * 0 | ************ 0 | *** * 0 | * 17.5 + * * * * * +----------------------------------------------------------------+ .4 sq feet in 1,000's 3.85 . correlate price size (obs=93) | price size ---------+------------------ price | 1.0000 size | 0.8988 1.0000 . regress price size Source | SS df MS Number of obs = 93 ---------+------------------------------ F( 1, 91) = 382.63 Model | 145097.459 1 145097.459 Prob > F = 0.0000 Residual | 34508.4029 91 379.213218 R-squared = 0.8079 ---------+------------------------------ Adj R-squared = 0.8058 Total | 179605.862 92 1952.23763 Root MSE = 19.473 ------------------------------------------------------------------------------ price | Coef. Std. Err. t P>|t| [95% Conf. Interval] ---------+-------------------------------------------------------------------- size | 75.60684 3.865208 19.561 0.000 67.92908 83.2846 _cons | -25.19356 6.68845 -3.767 0.000 -38.47935 -11.90778 ------------------------------------------------------------------------------ . predict yhat . predict resid, residual . predict zresid, rstandard . graph price yhat size, connect(.s) . stem zresid Stem-and-leaf plot for zresid (Standardized residuals) zresid rounded to nearest multiple of .01 plot in units of .01 -3** | 03 -2** | 69 -2** | 36 -1** | 93,68 -1** | 46,32,26,13,07,03,02,01 -0** | 93,85,85,84,84,83,75,72,72,57,55,54 -0** | 49,47,43,38,38,38,38,37,34,33,29,21,19,18,11,10,06 0** | 05,05,06,07,11,13,15,20,21,22,28,31,33,33,33,36,36,37,43,48,49,49 0** | 53,54,56,57,58,59,66,69,69,72,74,78,81,93,93,94,95 1** | 02,04,09,10,10,10,13,14,17,26,46 1** | 2** | 2** | 3** | 3** | 4** | 4** | 65 . graph zresid, histogram normal bin(15) . qnorm zresid . sort zresid . list size price zresid in 1/5 size price zresid 1. 3.05 149 -3.033176 2. 1.28 19.6 -2.691249 3. 2.1 88.1 -2.357733 4. 1.74 69 -1.929348 5. 2.4 124 -1.684739 . list size price zresid in -5/l size price zresid 89. 1.43 105 1.140879 90. 1.62 120 1.172573 91. 1.15 86 1.258087 92. 2.25 172.9 1.455004 93. 3.3 309.4 4.652866 . rvpplot size, yline(0) . rvfplot, yline(0) drop if price>=250 . regress price size Source | SS df MS Number of obs = 91 -------------+------------------------------ F( 1, 89) = 268.65 Model | 76106.4446 1 76106.4446 Prob > F = 0.0000 Residual | 25212.8979 89 283.290988 R-squared = 0.7512 -------------+------------------------------ Adj R-squared = 0.7484 Total | 101319.342 90 1125.77047 Root MSE = 16.831 ------------------------------------------------------------------------------ price | Coef. Std. Err. t P>|t| [95% Conf. Interval] -------------+---------------------------------------------------------------- size | 65.6568 4.005764 16.39 0.000 57.69743 73.61617 _cons | -10.29033 6.676088 -1.54 0.127 -23.55558 2.974911 ------------------------------------------------------------------------------ . plot price size 190 + s | * e | l | * l | | p | * * * * r | **** * i | * * * c | * * * * e | ** **** * * * | *** ** * ** i | * ** * n | * *** * ** ** * | ** * * * *** 1 | *** ** * * , | * * 0 | * 0 | 0 | ** * 17.5 + * * * +----------------------------------------------------------------+ .4 sq feet in 1,000's 3.05 . predict zresid2, rstandard . graph zresid2,histogram normal bin(15)