part 1 Download, clean, import and analyze data following all specific tasks bel

part 1
Download, clean, import and analyze data following all specific tasks below (total: 10 points).
1. You want to do research on the role of institutions and finance in economic development around the world or some specific region (e.g. Middle-East, Africa). So, you need to download, prepare and analyze relevant data.
2. Go the World Development Indicators database.1 Choose and prepare in long form (variables in columns and countries/years in rows) and download in CSV format the economic variables below for any 5+ countries during the last 10+ years:
a) GDP growth (annual %);
b) GDP per capita (constant 2010 US$)
c) Population growth (annual %)
d) Population density (people per sq. km of land area)
e) Population, total
f) Portfolio Investment, net (BoP, current US$)
g) Deposit interest rate (%)
h) Depth of credit information index (0=low to 8=high)
3. Go the Worldwide Governance Indicators database.2 Download in long form (variables in columns and countries/years in rows) and CSV format the institutional variables below for all countries during the last 10+ years (same as above):
a) Control of Corruption: Estimate [CC.EST]
b) Government Effectiveness: Estimate [GE.EST]
c) Political Stability and Absence of Violence/Terrorism: Estimate [PV.EST]
d) Regulatory Quality: Estimate [RQ.EST]
e) Rule of Law: Estimate [RL.EST]
f) Voice and Accountability: Estimate [VA.EST]
4. Go the Global Financial Development Indicators database.3 Download in long form (variables in columns and countries/years in rows) and CSV format the financial variables below for all countries during the last 10+ years (same as above):
a) ATMs per 100,000 adults
b) Bank concentration (%)
c) Banking crisis dummy (1=banking crisis, 0=none)
d) Domestic credit to private sector (% of GDP)
e) Gross portfolio debt assets to GDP (%)
f) Stock market turnover ratio (%)
g) Stock market total value traded to GDP (%)
h) Stock market capitalization to GDP (%)
5.
1 . See https://databank.worldbank.org/source/world-development-indicators
2 . See https://databank.worldbank.org/source/worldwide-governance-indicators#
3 . See https://databank.worldbank.org/source/global-financial-development
6. Clean, save (as CSV) and import both CSV/Excel datasets into Stata. Name and save the new Stata datasets as dataset1 and dataset2 and dataset3 with an easy (3-digit) name in an easy-to-use folder (desktop)
7. Rename the variables (3-digits) and the variable labels (5-10 characters) of both datasets, making them short and readable. Also, regarding the relevant variables choose the names country and year.
8. Sort the variables of both Stata datasets by both country and year, and subsequently generate a unique id variable for all observations. Sort the dataset by the id and save it again.
9. After sorting them properly, merge the dataset1 with the dataset2 by common identifiers (say country and year). Make sure the identifier(s) is/are the same in the 2 datasets. Once you merge the data, sort again the combined dataset by id and clean the resulting file after inspecting the data. Then merge the resulting combined dataset with the dataset3 using the same common identifiers (say country and year).
10. Generate a new variable (give it a short name too), which is the squared value, divided by 3, of the variable Deposit interest rate.
11. Perform detailed summary statistics analysis of all variables in the combined Stata dataset and transfer the results in a Word file in a proper table format. Commend on your findings (2-3 sentences). Write your name & ID in the Word file and save it.
12. Choose any two variables and perform a t-test of equality of means. Transfer the table results to the saved Word file and commend on your findings (2-3 sentences).
13. Designate one variable as dependent variable (Y) and perform an anova test between the Y var and any other var in your data. Transfer the table results to Word file and commend on your findings (2-3 sentences).
14. Perform a test the equality of distribution of the var GDP growth (annual %) across all levels of the categorical variable Banking crisis dummy. Transfer the table results to Word file and commend on your findings (2-3 sentences).
15. Create a twoway scatter graph of the variables GDP per capita and Population Growth (%) (whatever the names you gave them) and copy and paste properly the graph in the Word file you have created. Commend on your findings (1-2 sentences). Save again.
16. Create a density function graph of the variable GDP growth rate (%) (whatever the name you gave it) and copy and paste the graph in the Word file you have created. Commend on your findings (1-2 sentences). Save again.
17. Add any other analysis, if you may want to, but make sure to be correct.
18. Write the syntax of all the Stata commands you used in your analysis at the end of the Word file. Save again.
19. Upload both the (a) combined Stata dataset and the (b) Word file with your name and student ID on Blackboard
part 2
Recall that your clean, formatted and combined Stata dataset from part 1
should contain the following variables for 5 countries (at least) for 10 years:
a) GDP growth (annual %); Economic / dependent (Y)
b) GDP per capita (constant 2010 US$) Economic
c) Population growth (annual %) Economic
d) Population density (people per sq. km of land area) Demographic
e) Population, total Demographic
f) Portfolio Investment, net (BoP, current US$) Financial
g) Deposit interest rate (%) Financial
h) Depth of credit information index (0=low to 8=high) Institutional
a) Control of Corruption: Estimate [CC.EST] Institutional
b) Government Effectiveness: Estimate [GE.EST] Institutional
c) Political Stability and Absence of Violence/Terrorism: Estimate [PV.EST] Institutional
d) Regulatory Quality: Estimate [RQ.EST] Institutional
e) Rule of Law: Estimate [RL.EST] Institutional
f) Voice and Accountability: Estimate [VA.EST] Institutional
a) ATMs per 100,000 adults Financial
b) Bank concentration (%) Financial
c) Banking crisis dummy (1=banking crisis, 0=none) Financial
d) Domestic credit to private sector (% of GDP) Financial
e) Gross portfolio debt assets to GDP (%) Financial
f) Stock market turnover ratio (%) Financial
g) Stock market total value traded to GDP (%) Financial
h) Stock market capitalization to GDP (%) Financial
2. Use the GDP growth rate (%) as your dependent variable Y. Assert that your dependent variable
Y is suitable for an Ordinary-Least-Square (OLS) regression method (Assumption 1).
3. Choose 5 independent variables (regressors). These should include al least 1 economic variable,
1 financial variable, 1 demographic variable, and 1 institutional variable. Run various regressions
until you decide (based on t-test results), which are variables are suitable (statistically
significant) for inclusion in the regression analysis.
4. Check whether the 5 independent variables (taken pairwise) are independent from each other
(Assumption 2). Present the test results in one combined Word table.
5. Check whether the 5+1 variables are normally distributed (Assumption 7). Present the test results
in one combined Word table.
6. Check whether the 5 independent variables (taken altogether) are not collinear among
themselves (calculate and present the correlation matrix) (Assumption 3A). Present the
correlation results in one combined table. If they are collinear (pairwise correlations higher than
50%), then change variables and use others, which are not. Run various regressions until you decide (based on t-test results) which are variables are suitable (statistically significant) for
inclusion in the regression analysis. Present the test results in one combined Word table.
7. Check whether all 5+1 variables have outlier values. If they do, correct for them either by (1) taking the logarithmic transformation of the initial variables or by (2) eliminating them, or by (3) winsorizing them1 (Assumption 4). Explain whether you corrected for outliers and, if yes, how you did it. Present the test results in one combined Word table.
8. Check whether the observations (not the variables) are independent from each other (Assumption 5). Present the test results in one combined Word table.
9. Run a nested regression (one regression line for each and all variables) and present all the results in one Word table.
10. Upload the full Word file with your name and student ID on Blackboard’s